Correlation Between LIBERTY DEFENSE and ASSA ABLOY
Can any of the company-specific risk be diversified away by investing in both LIBERTY DEFENSE and ASSA ABLOY 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 LIBERTY DEFENSE and ASSA ABLOY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIBERTY DEFENSE H and ASSA ABLOY AB, you can compare the effects of market volatilities on LIBERTY DEFENSE and ASSA ABLOY 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 LIBERTY DEFENSE with a short position of ASSA ABLOY. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIBERTY DEFENSE and ASSA ABLOY.
Diversification Opportunities for LIBERTY DEFENSE and ASSA ABLOY
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LIBERTY and ASSA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LIBERTY DEFENSE H and ASSA ABLOY AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSA ABLOY AB and LIBERTY DEFENSE 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 LIBERTY DEFENSE H are associated (or correlated) with ASSA ABLOY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSA ABLOY AB has no effect on the direction of LIBERTY DEFENSE i.e., LIBERTY DEFENSE and ASSA ABLOY go up and down completely randomly.
Pair Corralation between LIBERTY DEFENSE and ASSA ABLOY
Assuming the 90 days trading horizon LIBERTY DEFENSE H is expected to generate 9.97 times more return on investment than ASSA ABLOY. However, LIBERTY DEFENSE is 9.97 times more volatile than ASSA ABLOY AB. It trades about 0.06 of its potential returns per unit of risk. ASSA ABLOY AB is currently generating about 0.08 per unit of risk. If you would invest 80.00 in LIBERTY DEFENSE H on October 16, 2024 and sell it today you would lose (24.00) from holding LIBERTY DEFENSE H or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIBERTY DEFENSE H vs. ASSA ABLOY AB
Performance |
| Timeline |
| LIBERTY DEFENSE H |
| ASSA ABLOY AB |
LIBERTY DEFENSE and ASSA ABLOY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIBERTY DEFENSE and ASSA ABLOY
The main advantage of trading using opposite LIBERTY DEFENSE and ASSA ABLOY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIBERTY DEFENSE position performs unexpectedly, ASSA ABLOY 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 ASSA ABLOY will offset losses from the drop in ASSA ABLOY's long position.| LIBERTY DEFENSE vs. ASSA ABLOY AB | LIBERTY DEFENSE vs. Halma plc | LIBERTY DEFENSE vs. Allegion plc | LIBERTY DEFENSE vs. Superior Plus Corp |
| ASSA ABLOY vs. SIDETRADE EO 1 | ASSA ABLOY vs. Tencent Music Entertainment | ASSA ABLOY vs. KENEDIX OFFICE INV | ASSA ABLOY vs. Zoom Video Communications |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |