Correlation Between Marriott International and ASSA ABLOY
Can any of the company-specific risk be diversified away by investing in both Marriott International 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 Marriott International and ASSA ABLOY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marriott International and ASSA ABLOY AB, you can compare the effects of market volatilities on Marriott International 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 Marriott International with a short position of ASSA ABLOY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marriott International and ASSA ABLOY.
Diversification Opportunities for Marriott International and ASSA ABLOY
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Marriott and ASSA is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Marriott International 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 Marriott International 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 Marriott International 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 Marriott International i.e., Marriott International and ASSA ABLOY go up and down completely randomly.
Pair Corralation between Marriott International and ASSA ABLOY
Assuming the 90 days horizon Marriott International is expected to generate 1.2 times more return on investment than ASSA ABLOY. However, Marriott International is 1.2 times more volatile than ASSA ABLOY AB. It trades about 0.05 of its potential returns per unit of risk. ASSA ABLOY AB is currently generating about -0.03 per unit of risk. If you would invest 26,895 in Marriott International on September 30, 2024 and sell it today you would earn a total of 315.00 from holding Marriott International or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marriott International vs. ASSA ABLOY AB
Performance |
| Timeline |
| Marriott International |
| ASSA ABLOY AB |
Marriott International and ASSA ABLOY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marriott International and ASSA ABLOY
The main advantage of trading using opposite Marriott International and ASSA ABLOY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marriott International 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.| Marriott International vs. H World Group | Marriott International vs. Hyatt Hotels | Marriott International vs. InterContinental Hotels Group | Marriott International vs. INTERCONT HOTELS |
| ASSA ABLOY vs. ABB PAR AB | ASSA ABLOY vs. SECOM LTD | ASSA ABLOY vs. Halma plc | ASSA ABLOY vs. Allegion plc |
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.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |