Correlation Between G4S Plc and Assa Abloy
Can any of the company-specific risk be diversified away by investing in both G4S Plc 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 G4S Plc and Assa Abloy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G4S Plc and Assa Abloy AB, you can compare the effects of market volatilities on G4S Plc 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 G4S Plc with a short position of Assa Abloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of G4S Plc and Assa Abloy.
Diversification Opportunities for G4S Plc and Assa Abloy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between G4S and Assa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding G4S Plc 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 G4S Plc 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 G4S Plc 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 G4S Plc i.e., G4S Plc and Assa Abloy go up and down completely randomly.
Pair Corralation between G4S Plc and Assa Abloy
If you would invest (100.00) in G4S Plc on January 20, 2024 and sell it today you would earn a total of 100.00 from holding G4S Plc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
G4S Plc vs. Assa Abloy AB
Performance |
| Timeline |
| G4S Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Assa Abloy AB |
G4S Plc and Assa Abloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G4S Plc and Assa Abloy
The main advantage of trading using opposite G4S Plc and Assa Abloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G4S Plc 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.The idea behind G4S Plc and Assa Abloy AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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