Correlation Between ANGLO ASIAN and ASSA ABLOY
Can any of the company-specific risk be diversified away by investing in both ANGLO ASIAN and ASSA ABLOY 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 ANGLO ASIAN and ASSA ABLOY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGLO ASIAN MINING and ASSA ABLOY AB, you can compare the effects of market volatilities on ANGLO ASIAN and ASSA ABLOY 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 ANGLO ASIAN with a short position of ASSA ABLOY. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLO ASIAN and ASSA ABLOY.
Diversification Opportunities for ANGLO ASIAN and ASSA ABLOY
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between ANGLO and ASSA is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO ASIAN MINING and ASSA ABLOY AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSA ABLOY AB and ANGLO ASIAN 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 ANGLO ASIAN MINING are associated (or correlated) with ASSA ABLOY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSA ABLOY AB has no effect on the direction of ANGLO ASIAN i.e., ANGLO ASIAN and ASSA ABLOY go up and down completely randomly.
Pair Corralation between ANGLO ASIAN and ASSA ABLOY
Assuming the 90 days trading horizon ANGLO ASIAN MINING is expected to generate 1.8 times more return on investment than ASSA ABLOY. However, ANGLO ASIAN is 1.8 times more volatile than ASSA ABLOY AB. It trades about 0.13 of its potential returns per unit of risk. ASSA ABLOY AB is currently generating about 0.05 per unit of risk. If you would invest 122.00 in ANGLO ASIAN MINING on November 7, 2024 and sell it today you would earn a total of 8.00 from holding ANGLO ASIAN MINING or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
ANGLO ASIAN MINING vs. ASSA ABLOY AB
Performance |
| Timeline |
| ANGLO ASIAN MINING |
| ASSA ABLOY AB |
ANGLO ASIAN and ASSA ABLOY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGLO ASIAN and ASSA ABLOY
The main advantage of trading using opposite ANGLO ASIAN and ASSA ABLOY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGLO ASIAN position performs unexpectedly, ASSA ABLOY 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 ASSA ABLOY will offset losses from the drop in ASSA ABLOY's long position.| ANGLO ASIAN vs. Apple Inc | ANGLO ASIAN vs. Apple Inc | ANGLO ASIAN vs. Apple Inc | ANGLO ASIAN vs. Apple Inc |
| ASSA ABLOY vs. PennantPark Investment | ASSA ABLOY vs. Guangdong Investment Limited | ASSA ABLOY vs. Townsquare Media | ASSA ABLOY vs. Ubisoft Entertainment SA |
Check out your portfolio center.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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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