Correlation Between ASSA ABLOY and MARKET VECTR
Can any of the company-specific risk be diversified away by investing in both ASSA ABLOY and MARKET VECTR 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 MARKET VECTR 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 MARKET VECTR RETAIL, you can compare the effects of market volatilities on ASSA ABLOY and MARKET VECTR 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 MARKET VECTR. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASSA ABLOY and MARKET VECTR.
Diversification Opportunities for ASSA ABLOY and MARKET VECTR
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ASSA and MARKET is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding ASSA ABLOY AB and MARKET VECTR RETAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARKET VECTR RETAIL 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 MARKET VECTR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARKET VECTR RETAIL has no effect on the direction of ASSA ABLOY i.e., ASSA ABLOY and MARKET VECTR go up and down completely randomly.
Pair Corralation between ASSA ABLOY and MARKET VECTR
Assuming the 90 days trading horizon ASSA ABLOY is expected to generate 1.65 times less return on investment than MARKET VECTR. In addition to that, ASSA ABLOY is 2.13 times more volatile than MARKET VECTR RETAIL. It trades about 0.11 of its total potential returns per unit of risk. MARKET VECTR RETAIL is currently generating about 0.4 per unit of volatility. If you would invest 21,650 in MARKET VECTR RETAIL on October 30, 2024 and sell it today you would earn a total of 1,135 from holding MARKET VECTR RETAIL or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
ASSA ABLOY AB vs. MARKET VECTR RETAIL
Performance |
| Timeline |
| ASSA ABLOY AB |
| MARKET VECTR RETAIL |
ASSA ABLOY and MARKET VECTR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASSA ABLOY and MARKET VECTR
The main advantage of trading using opposite ASSA ABLOY and MARKET VECTR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASSA ABLOY position performs unexpectedly, MARKET VECTR 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 MARKET VECTR will offset losses from the drop in MARKET VECTR's long position.| ASSA ABLOY vs. MINCO SILVER | ASSA ABLOY vs. China Railway Construction | ASSA ABLOY vs. ANGLO ASIAN MINING | ASSA ABLOY vs. North American Construction |
| MARKET VECTR vs. DEVRY EDUCATION GRP | MARKET VECTR vs. G8 EDUCATION | MARKET VECTR vs. RCI Hospitality Holdings | MARKET VECTR vs. TAL Education Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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