Correlation Between Medco Holdings and Security Bank

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

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

Diversification Opportunities for Medco Holdings and Security Bank

-0.49

Correlation Coefficient

Medco Holdings  Security Bank

Very good diversification

The 3 months correlation between Medco and Security is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Medco Holdings and Security Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Bank Corp and Medco Holdings 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 Medco Holdings are associated (or correlated) with Security Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Bank Corp has no effect on the direction of Medco Holdings i.e., Medco Holdings and Security Bank go up and down completely randomly.

Pair Corralation between Medco Holdings and Security Bank

Assuming the 90 days trading horizon Medco Holdings is expected to under-perform the Security Bank. In addition to that, Medco Holdings is 2.11 times more volatile than Security Bank Corp. It trades about -0.1 of its total potential returns per unit of risk. Security Bank Corp is currently generating about 0.15 per unit of volatility. If you would invest  6,200  in Security Bank Corp on April 24, 2025 and sell it today you would earn a total of  1,345  from holding Security Bank Corp or generate 21.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	72.13%
Values	Daily Returns

Medco Holdings  vs.  Security Bank Corp

Medco Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Medco Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Security Bank Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Security Bank Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Security Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Medco Holdings and Security Bank

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

The idea behind Medco Holdings and Security Bank Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.