Correlation Between ASSA ABLOY and AAC TECHNOLOGHLDGADR
Can any of the company-specific risk be diversified away by investing in both ASSA ABLOY and AAC TECHNOLOGHLDGADR 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 ASSA ABLOY and AAC TECHNOLOGHLDGADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASSA ABLOY AB and AAC TECHNOLOGHLDGADR, you can compare the effects of market volatilities on ASSA ABLOY and AAC TECHNOLOGHLDGADR 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 ASSA ABLOY with a short position of AAC TECHNOLOGHLDGADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASSA ABLOY and AAC TECHNOLOGHLDGADR.
Diversification Opportunities for ASSA ABLOY and AAC TECHNOLOGHLDGADR
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ASSA and AAC is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ASSA ABLOY AB and AAC TECHNOLOGHLDGADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC TECHNOLOGHLDGADR and ASSA ABLOY 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 ASSA ABLOY AB are associated (or correlated) with AAC TECHNOLOGHLDGADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC TECHNOLOGHLDGADR has no effect on the direction of ASSA ABLOY i.e., ASSA ABLOY and AAC TECHNOLOGHLDGADR go up and down completely randomly.
Pair Corralation between ASSA ABLOY and AAC TECHNOLOGHLDGADR
If you would invest 448.00 in AAC TECHNOLOGHLDGADR on October 31, 2024 and sell it today you would earn a total of 18.00 from holding AAC TECHNOLOGHLDGADR or generate 4.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
ASSA ABLOY AB vs. AAC TECHNOLOGHLDGADR
Performance |
| Timeline |
| ASSA ABLOY AB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| AAC TECHNOLOGHLDGADR |
ASSA ABLOY and AAC TECHNOLOGHLDGADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASSA ABLOY and AAC TECHNOLOGHLDGADR
The main advantage of trading using opposite ASSA ABLOY and AAC TECHNOLOGHLDGADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASSA ABLOY position performs unexpectedly, AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR will offset losses from the drop in AAC TECHNOLOGHLDGADR's long position.| ASSA ABLOY vs. Singapore Reinsurance | ASSA ABLOY vs. ZURICH INSURANCE GROUP | ASSA ABLOY vs. QBE Insurance Group | ASSA ABLOY vs. UNIQA INSURANCE GR |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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