Correlation Between Assa Abloy and Geberit AG

Can any of the company-specific risk be diversified away by investing in both Assa Abloy and Geberit AG 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 Assa Abloy and Geberit AG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Assa Abloy AB and Geberit AG ADR, you can compare the effects of market volatilities on Assa Abloy and Geberit AG 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 Assa Abloy with a short position of Geberit AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assa Abloy and Geberit AG.

Diversification Opportunities for Assa Abloy and Geberit AG

0.44

Correlation Coefficient

Assa Abloy  Geberit AG

Very weak diversification

The 3 months correlation between Assa and Geberit is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Assa Abloy AB and Geberit AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geberit AG ADR and Assa Abloy 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 Assa Abloy AB are associated (or correlated) with Geberit AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geberit AG ADR has no effect on the direction of Assa Abloy i.e., Assa Abloy and Geberit AG go up and down completely randomly.

Pair Corralation between Assa Abloy and Geberit AG

Assuming the 90 days horizon Assa Abloy is expected to generate 1.08 times less return on investment than Geberit AG. In addition to that, Assa Abloy is 1.24 times more volatile than Geberit AG ADR. It trades about 0.1 of its total potential returns per unit of risk. Geberit AG ADR is currently generating about 0.13 per unit of volatility. If you would invest  7,113  in Geberit AG ADR on May 6, 2025 and sell it today you would earn a total of  633.00  from holding Geberit AG ADR or generate 8.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Assa Abloy AB  vs.  Geberit AG ADR

Assa Abloy AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Assa Abloy AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Assa Abloy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Geberit AG ADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Geberit AG ADR are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Geberit AG may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Assa Abloy and Geberit AG

The main advantage of trading using opposite Assa Abloy and Geberit AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assa Abloy position performs unexpectedly, Geberit AG 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 Geberit AG will offset losses from the drop in Geberit AG's long position.

The idea behind Assa Abloy AB and Geberit AG ADR 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.

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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 Stocks Directory module to find actively traded stocks across global markets.