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Cloud federations allow Cloud Service Providers (CSPs) to deliver more efficient service performance by interconnecting their Cloud environments and sharing their resources. However, the security of the federated Cloud service could be compromised if the resources are shared with relatively insecure and unreliable CSPs. In this paper, we propose a Cloud federation formation model that considers the security risk levels of CSPs. We start by quantifying the security risk of CSPs according to well defined evaluation criteria related to security risk avoidance and mitigation, then we model the Cloud federation formation process as a hedonic coalitional game with a preference relation that is based on the security risk levels and reputations of CSPs. We propose a federation formation algorithm that enables CSPs to cooperate while considering the security risk introduced to their infrastructures, and refrain from …