Correlation Between G4S Plc and SECOM CO
Can any of the company-specific risk be diversified away by investing in both G4S Plc and SECOM CO at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining G4S Plc and SECOM CO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G4S Plc and SECOM LTD, you can compare the effects of market volatilities on G4S Plc and SECOM CO and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in G4S Plc with a short position of SECOM CO. Check out your portfolio center. Please also check ongoing floating volatility patterns of G4S Plc and SECOM CO.
Diversification Opportunities for G4S Plc and SECOM CO
Pay attention - limited upside
The 3 months correlation between G4S and SECOM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding G4S Plc and SECOM LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECOM LTD and G4S Plc is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on G4S Plc are associated (or correlated) with SECOM CO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SECOM LTD has no effect on the direction of G4S Plc i.e., G4S Plc and SECOM CO go up and down completely randomly.
Pair Corralation between G4S Plc and SECOM CO
If you would invest 6,624 in SECOM LTD on January 24, 2024 and sell it today you would earn a total of 490.00 from holding SECOM LTD or generate 7.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
G4S Plc vs. SECOM LTD
Performance |
| Timeline |
| G4S Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SECOM LTD |
G4S Plc and SECOM CO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G4S Plc and SECOM CO
The main advantage of trading using opposite G4S Plc and SECOM CO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G4S Plc position performs unexpectedly, SECOM CO can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SECOM CO will offset losses from the drop in SECOM CO's long position.| G4S Plc vs. Falcon Metals Limited | G4S Plc vs. Summit Materials | G4S Plc vs. Life Time Group | G4S Plc vs. US GoldMining Common |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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