Correlation Between ATT and ASSA ABLOY
Can any of the company-specific risk be diversified away by investing in both ATT 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 ATT and ASSA ABLOY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and ASSA ABLOY AB, you can compare the effects of market volatilities on ATT 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 ATT with a short position of ASSA ABLOY. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and ASSA ABLOY.
Diversification Opportunities for ATT and ASSA ABLOY
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ATT and ASSA is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc 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 ATT 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 ATT Inc 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 ATT i.e., ATT and ASSA ABLOY go up and down completely randomly.
Pair Corralation between ATT and ASSA ABLOY
Assuming the 90 days trading horizon ATT is expected to generate 2.12 times less return on investment than ASSA ABLOY. But when comparing it to its historical volatility, ATT Inc is 1.04 times less risky than ASSA ABLOY. It trades about 0.05 of its potential returns per unit of risk. ASSA ABLOY AB is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,332 in ASSA ABLOY AB on September 30, 2024 and sell it today you would earn a total of 1,513 from holding ASSA ABLOY AB or generate 113.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. ASSA ABLOY AB
Performance |
| Timeline |
| ATT Inc |
| ASSA ABLOY AB |
ATT and ASSA ABLOY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and ASSA ABLOY
The main advantage of trading using opposite ATT and ASSA ABLOY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT 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.| ATT vs. Iridium Communications | ATT vs. COSMOSTEEL HLDGS | ATT vs. Spirent Communications plc | ATT vs. China Communications Services |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |