Correlation Between ASSA ABLOY and Blue Line
Can any of the company-specific risk be diversified away by investing in both ASSA ABLOY and Blue Line 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 Blue Line 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 Blue Line Protection, you can compare the effects of market volatilities on ASSA ABLOY and Blue Line 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 Blue Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASSA ABLOY and Blue Line.
Diversification Opportunities for ASSA ABLOY and Blue Line
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ASSA and Blue is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ASSA ABLOY AB and Blue Line Protection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Line Protection 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 Blue Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Line Protection has no effect on the direction of ASSA ABLOY i.e., ASSA ABLOY and Blue Line go up and down completely randomly.
Pair Corralation between ASSA ABLOY and Blue Line
Assuming the 90 days horizon ASSA ABLOY is expected to generate 7.25 times less return on investment than Blue Line. But when comparing it to its historical volatility, ASSA ABLOY AB is 5.96 times less risky than Blue Line. It trades about 0.06 of its potential returns per unit of risk. Blue Line Protection is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Blue Line Protection on September 3, 2024 and sell it today you would lose (16.50) from holding Blue Line Protection or give up 71.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
ASSA ABLOY AB vs. Blue Line Protection
Performance |
| Timeline |
| ASSA ABLOY AB |
| Blue Line Protection |
ASSA ABLOY and Blue Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASSA ABLOY and Blue Line
The main advantage of trading using opposite ASSA ABLOY and Blue Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASSA ABLOY position performs unexpectedly, Blue Line 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 Blue Line will offset losses from the drop in Blue Line's long position.| ASSA ABLOY vs. Bridger Aerospace Group | ASSA ABLOY vs. ATWEC Technologies | ASSA ABLOY vs. Assa Abloy AB | ASSA ABLOY vs. Brinks Company |
| Blue Line vs. BIO Key International | Blue Line vs. LogicMark | Blue Line vs. Knightscope | Blue Line vs. Guardforce AI Co |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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