Correlation Between Assa Abloy and Vopia
Can any of the company-specific risk be diversified away by investing in both Assa Abloy and Vopia 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 Vopia 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 Vopia Inc, you can compare the effects of market volatilities on Assa Abloy and Vopia 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 Vopia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assa Abloy and Vopia.
Diversification Opportunities for Assa Abloy and Vopia
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Assa and Vopia is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Assa Abloy AB and Vopia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vopia Inc 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 Vopia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vopia Inc has no effect on the direction of Assa Abloy i.e., Assa Abloy and Vopia go up and down completely randomly.
Pair Corralation between Assa Abloy and Vopia
Assuming the 90 days horizon Assa Abloy AB is expected to under-perform the Vopia. But the pink sheet apears to be less risky and, when comparing its historical volatility, Assa Abloy AB is 13.46 times less risky than Vopia. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Vopia Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 0.03 in Vopia Inc on September 2, 2024 and sell it today you would lose (0.01) from holding Vopia Inc or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Assa Abloy AB vs. Vopia Inc
Performance |
| Timeline |
| Assa Abloy AB |
| Vopia Inc |
Assa Abloy and Vopia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assa Abloy and Vopia
The main advantage of trading using opposite Assa Abloy and Vopia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assa Abloy position performs unexpectedly, Vopia 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 Vopia will offset losses from the drop in Vopia's long position.| Assa Abloy vs. Atlas Copco AB | Assa Abloy vs. Carlsberg AS | Assa Abloy vs. DSV Panalpina AS | Assa Abloy vs. Alfa Laval AB |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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