Correlation Between ASSA ABLOY and Gentoo Media

Can any of the company-specific risk be diversified away by investing in both ASSA ABLOY and Gentoo Media 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 Gentoo Media 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 Gentoo Media, you can compare the effects of market volatilities on ASSA ABLOY and Gentoo Media 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 Gentoo Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASSA ABLOY and Gentoo Media.

Diversification Opportunities for ASSA ABLOY and Gentoo Media

-0.51

Correlation Coefficient

ASSA ABLOY  Gentoo Media

Excellent diversification

The 3 months correlation between ASSA and Gentoo is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding ASSA ABLOY AB and Gentoo Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentoo Media 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 Gentoo Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentoo Media has no effect on the direction of ASSA ABLOY i.e., ASSA ABLOY and Gentoo Media go up and down completely randomly.

Pair Corralation between ASSA ABLOY and Gentoo Media

Assuming the 90 days trading horizon ASSA ABLOY AB is expected to generate 0.35 times more return on investment than Gentoo Media. However, ASSA ABLOY AB is 2.88 times less risky than Gentoo Media. It trades about 0.14 of its potential returns per unit of risk. Gentoo Media is currently generating about -0.13 per unit of risk. If you would invest  28,260  in ASSA ABLOY AB on April 24, 2025 and sell it today you would earn a total of  3,280  from holding ASSA ABLOY AB or generate 11.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

ASSA ABLOY AB  vs.  Gentoo Media

ASSA ABLOY AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ASSA ABLOY AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ASSA ABLOY may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Gentoo Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gentoo Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ASSA ABLOY and Gentoo Media

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

The idea behind ASSA ABLOY AB and Gentoo Media 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.