Correlation Between NYSE Composite and ASSA ABLOY
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and ASSA ABLOY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and ASSA ABLOY AB, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of ASSA ABLOY. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and ASSA ABLOY.
Diversification Opportunities for NYSE Composite and ASSA ABLOY
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and ASSA is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and ASSA ABLOY go up and down completely randomly.
Pair Corralation between NYSE Composite and ASSA ABLOY
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.66 times less return on investment than ASSA ABLOY. But when comparing it to its historical volatility, NYSE Composite is 3.02 times less risky than ASSA ABLOY. It trades about 0.14 of its potential returns per unit of risk. ASSA ABLOY AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,358 in ASSA ABLOY AB on September 3, 2024 and sell it today you would earn a total of 728.00 from holding ASSA ABLOY AB or generate 30.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 82.19% |
| Values | Daily Returns |
NYSE Composite vs. ASSA ABLOY AB
Performance |
| Timeline |
NYSE Composite and ASSA ABLOY Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
ASSA ABLOY AB
Pair trading matchups for ASSA ABLOY
Pair Trading with NYSE Composite and ASSA ABLOY
The main advantage of trading using opposite NYSE Composite and ASSA ABLOY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| ASSA ABLOY vs. Bridger Aerospace Group | ASSA ABLOY vs. ATWEC Technologies | ASSA ABLOY vs. Assa Abloy AB | ASSA ABLOY vs. Brinks Company |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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