Correlation Between Velocity Financial and Security National

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

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

Diversification Opportunities for Velocity Financial and Security National

0.76

Correlation Coefficient

Velocity Financial  Security National

Poor diversification

The 3 months correlation between Velocity and Security is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Velocity Financial Llc and Security National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security National and Velocity Financial 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 Velocity Financial Llc 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 Velocity Financial i.e., Velocity Financial and Security National go up and down completely randomly.

Pair Corralation between Velocity Financial and Security National

Considering the 90-day investment horizon Velocity Financial Llc is expected to generate 0.64 times more return on investment than Security National. However, Velocity Financial Llc is 1.55 times less risky than Security National. It trades about -0.06 of its potential returns per unit of risk. Security National Financial is currently generating about -0.08 per unit of risk. If you would invest  1,840  in Velocity Financial Llc on February 3, 2025 and sell it today you would lose (128.00) from holding Velocity Financial Llc or give up 6.96% of portfolio value over 90 days.

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

Velocity Financial Llc  vs.  Security National Financial

Velocity Financial Llc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Velocity Financial Llc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Velocity Financial is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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 weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Velocity Financial and Security National

The main advantage of trading using opposite Velocity Financial and Security National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Velocity Financial 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 Velocity Financial Llc 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.