Correlation Between Zedcor and SSC Security

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

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

Diversification Opportunities for Zedcor and SSC Security

0.68

Correlation Coefficient

Zedcor  SSC Security

Poor diversification

The 3 months correlation between Zedcor and SSC is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Zedcor Inc and SSC Security Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Security Services and Zedcor 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 Zedcor Inc are associated (or correlated) with SSC Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Security Services has no effect on the direction of Zedcor i.e., Zedcor and SSC Security go up and down completely randomly.

Pair Corralation between Zedcor and SSC Security

Assuming the 90 days horizon Zedcor Inc is expected to generate 4.5 times more return on investment than SSC Security. However, Zedcor is 4.5 times more volatile than SSC Security Services. It trades about 0.2 of its potential returns per unit of risk. SSC Security Services is currently generating about 0.05 per unit of risk. If you would invest  135.00  in Zedcor Inc on September 15, 2024 and sell it today you would earn a total of  94.00  from holding Zedcor Inc or generate 69.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Zedcor Inc  vs.  SSC Security Services

Zedcor Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zedcor Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Zedcor reported solid returns over the last few months and may actually be approaching a breakup point.

SSC Security Services

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SSC Security Services are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SSC Security is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Zedcor and SSC Security

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

The idea behind Zedcor Inc and SSC Security Services 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.