Correlation Between Security National and FirstCash

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

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

Diversification Opportunities for Security National and FirstCash

0.16

Correlation Coefficient

Security National  FirstCash

Average diversification

The 3 months correlation between Security and FirstCash is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Security National Financial and FirstCash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstCash and Security National 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 Security National Financial are associated (or correlated) with FirstCash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstCash has no effect on the direction of Security National i.e., Security National and FirstCash go up and down completely randomly.

Pair Corralation between Security National and FirstCash

Assuming the 90 days horizon Security National Financial is expected to generate 1.35 times more return on investment than FirstCash. However, Security National is 1.35 times more volatile than FirstCash. It trades about -0.03 of its potential returns per unit of risk. FirstCash is currently generating about -0.07 per unit of risk. If you would invest  933.00  in Security National Financial on April 25, 2025 and sell it today you would lose (45.00) from holding Security National Financial or give up 4.82% of portfolio value over 90 days.

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

Security National Financial  vs.  FirstCash

Security National

Risk-Adjusted Performance

Very Weak

Over the last 90 days Security National Financial has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

FirstCash

Risk-Adjusted Performance

Very Weak

Over the last 90 days FirstCash has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Security National and FirstCash

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

The idea behind Security National Financial and FirstCash 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.