Correlation Between Assa Abloy and Loomis AB
Can any of the company-specific risk be diversified away by investing in both Assa Abloy and Loomis AB 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 Loomis AB 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 Loomis AB, you can compare the effects of market volatilities on Assa Abloy and Loomis AB 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 Loomis AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assa Abloy and Loomis AB.
Diversification Opportunities for Assa Abloy and Loomis AB
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Assa and Loomis is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Assa Abloy AB and Loomis AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis 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 Loomis AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loomis AB has no effect on the direction of Assa Abloy i.e., Assa Abloy and Loomis AB go up and down completely randomly.
Pair Corralation between Assa Abloy and Loomis AB
Assuming the 90 days horizon Assa Abloy is expected to generate 11.0 times less return on investment than Loomis AB. But when comparing it to its historical volatility, Assa Abloy AB is 3.67 times less risky than Loomis AB. It trades about 0.1 of its potential returns per unit of risk. Loomis AB is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 2,912 in Loomis AB on December 4, 2024 and sell it today you would earn a total of 1,120 from holding Loomis AB or generate 38.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Assa Abloy AB vs. Loomis AB
Performance |
| Timeline |
| Assa Abloy AB |
| Loomis AB |
Assa Abloy and Loomis AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assa Abloy and Loomis AB
The main advantage of trading using opposite Assa Abloy and Loomis AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assa Abloy position performs unexpectedly, Loomis AB 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 Loomis AB will offset losses from the drop in Loomis AB'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 |
| Loomis AB vs. Allegion PLC | Loomis AB vs. MSA Safety | Loomis AB vs. Resideo Technologies | Loomis AB vs. NL Industries |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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