Correlation Between FirstCash and Security National

Can any of the company-specific risk be diversified away by investing in both FirstCash and Security National 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 FirstCash and Security National into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FirstCash and Security National Financial, you can compare the effects of market volatilities on FirstCash and Security National 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 FirstCash with a short position of Security National. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstCash and Security National.

Diversification Opportunities for FirstCash and Security National

0.41

Correlation Coefficient

FirstCash  Security National

Very weak diversification

The 3 months correlation between FirstCash and Security is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding FirstCash and Security National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security National and FirstCash 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 FirstCash are associated (or correlated) with Security National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security National has no effect on the direction of FirstCash i.e., FirstCash and Security National go up and down completely randomly.

Pair Corralation between FirstCash and Security National

Given the investment horizon of 90 days FirstCash is expected to generate 0.76 times more return on investment than Security National. However, FirstCash is 1.31 times less risky than Security National. It trades about 0.11 of its potential returns per unit of risk. Security National Financial is currently generating about 0.02 per unit of risk. If you would invest  12,007  in FirstCash on April 20, 2025 and sell it today you would earn a total of  1,253  from holding FirstCash or generate 10.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

FirstCash  vs.  Security National Financial

FirstCash

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FirstCash are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, FirstCash may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Security National

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Security National Financial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Security National is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FirstCash and Security National

The main advantage of trading using opposite FirstCash and Security National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstCash position performs unexpectedly, Security National 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 Security National will offset losses from the drop in Security National's long position.

The idea behind FirstCash and Security National Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.