Correlation Between ASSA ABLOY and ATWEC Technologies
Can any of the company-specific risk be diversified away by investing in both ASSA ABLOY and ATWEC Technologies 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 ATWEC Technologies 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 ATWEC Technologies, you can compare the effects of market volatilities on ASSA ABLOY and ATWEC Technologies 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 ATWEC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASSA ABLOY and ATWEC Technologies.
Diversification Opportunities for ASSA ABLOY and ATWEC Technologies
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ASSA and ATWEC is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding ASSA ABLOY AB and ATWEC Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATWEC Technologies 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 ATWEC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATWEC Technologies has no effect on the direction of ASSA ABLOY i.e., ASSA ABLOY and ATWEC Technologies go up and down completely randomly.
Pair Corralation between ASSA ABLOY and ATWEC Technologies
Assuming the 90 days horizon ASSA ABLOY is expected to generate 60.95 times less return on investment than ATWEC Technologies. But when comparing it to its historical volatility, ASSA ABLOY AB is 20.85 times less risky than ATWEC Technologies. It trades about 0.05 of its potential returns per unit of risk. ATWEC Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.04 in ATWEC Technologies on November 3, 2024 and sell it today you would earn a total of 0.15 from holding ATWEC Technologies or generate 375.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.94% |
| Values | Daily Returns |
ASSA ABLOY AB vs. ATWEC Technologies
Performance |
| Timeline |
| ASSA ABLOY AB |
| ATWEC Technologies |
ASSA ABLOY and ATWEC Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASSA ABLOY and ATWEC Technologies
The main advantage of trading using opposite ASSA ABLOY and ATWEC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASSA ABLOY position performs unexpectedly, ATWEC Technologies 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 ATWEC Technologies will offset losses from the drop in ATWEC Technologies' long position.| ASSA ABLOY vs. Bridger Aerospace Group | ASSA ABLOY vs. ATWEC Technologies | ASSA ABLOY vs. Assa Abloy AB | ASSA ABLOY vs. Brinks Company |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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