Correlation Between ASSA ABLOY and Securitas
Can any of the company-specific risk be diversified away by investing in both ASSA ABLOY and Securitas 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 Securitas 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 Securitas AB, you can compare the effects of market volatilities on ASSA ABLOY and Securitas 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 Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASSA ABLOY and Securitas.
Diversification Opportunities for ASSA ABLOY and Securitas
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ASSA and Securitas is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding ASSA ABLOY AB and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB 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 Securitas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Securitas AB has no effect on the direction of ASSA ABLOY i.e., ASSA ABLOY and Securitas go up and down completely randomly.
Pair Corralation between ASSA ABLOY and Securitas
Assuming the 90 days trading horizon ASSA ABLOY is expected to generate 3.49 times less return on investment than Securitas. But when comparing it to its historical volatility, ASSA ABLOY AB is 1.0 times less risky than Securitas. It trades about 0.04 of its potential returns per unit of risk. Securitas AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,166 in Securitas AB on September 28, 2024 and sell it today you would earn a total of 36.00 from holding Securitas AB or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
ASSA ABLOY AB vs. Securitas AB
Performance |
| Timeline |
| ASSA ABLOY AB |
| Securitas AB |
ASSA ABLOY and Securitas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASSA ABLOY and Securitas
The main advantage of trading using opposite ASSA ABLOY and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASSA ABLOY position performs unexpectedly, Securitas 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 Securitas will offset losses from the drop in Securitas' long position.| ASSA ABLOY vs. ABB PAR AB | ASSA ABLOY vs. SECOM LTD | ASSA ABLOY vs. Halma plc | ASSA ABLOY vs. Allegion plc |
| Securitas vs. DATAGROUP SE | Securitas vs. LION ONE METALS | Securitas vs. Harmony Gold Mining | Securitas vs. INFORMATION SVC GRP |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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