Correlation Between SECURITAS and CORNISH METALS

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

By analyzing existing cross correlation between SECURITAS B and CORNISH METALS INC, you can compare the effects of market volatilities on SECURITAS and CORNISH METALS 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 SECURITAS with a short position of CORNISH METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SECURITAS and CORNISH METALS.

Diversification Opportunities for SECURITAS and CORNISH METALS

-0.05

Correlation Coefficient

SECURITAS  CORNISH METALS

Good diversification

The 3 months correlation between SECURITAS and CORNISH is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding SECURITAS B and CORNISH METALS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORNISH METALS INC and SECURITAS 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 SECURITAS B are associated (or correlated) with CORNISH METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORNISH METALS INC has no effect on the direction of SECURITAS i.e., SECURITAS and CORNISH METALS go up and down completely randomly.

Pair Corralation between SECURITAS and CORNISH METALS

Assuming the 90 days trading horizon SECURITAS B is expected to under-perform the CORNISH METALS. But the stock apears to be less risky and, when comparing its historical volatility, SECURITAS B is 1.4 times less risky than CORNISH METALS. The stock trades about 0.0 of its potential returns per unit of risk. The CORNISH METALS INC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  7.45  in CORNISH METALS INC on April 24, 2025 and sell it today you would earn a total of  1.15  from holding CORNISH METALS INC or generate 15.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

SECURITAS B   vs.  CORNISH METALS INC

SECURITAS B

Risk-Adjusted Performance

Very Weak

Over the last 90 days SECURITAS B has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SECURITAS is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

CORNISH METALS INC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CORNISH METALS INC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, CORNISH METALS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SECURITAS and CORNISH METALS

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

The idea behind SECURITAS B and CORNISH METALS INC 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.