Correlation Between ASSA ABLOY and Prostatype Genomics

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

Diversification Opportunities for ASSA ABLOY and Prostatype Genomics

-0.23

Correlation Coefficient

ASSA ABLOY  Prostatype Genomics

Very good diversification

The 3 months correlation between ASSA and Prostatype is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ASSA ABLOY AB and Prostatype Genomics AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prostatype Genomics 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 Prostatype Genomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prostatype Genomics has no effect on the direction of ASSA ABLOY i.e., ASSA ABLOY and Prostatype Genomics go up and down completely randomly.

Pair Corralation between ASSA ABLOY and Prostatype Genomics

Assuming the 90 days trading horizon ASSA ABLOY AB is expected to generate 0.1 times more return on investment than Prostatype Genomics. However, ASSA ABLOY AB is 9.59 times less risky than Prostatype Genomics. It trades about 0.19 of its potential returns per unit of risk. Prostatype Genomics AB is currently generating about -0.01 per unit of risk. If you would invest  27,273  in ASSA ABLOY AB on April 22, 2025 and sell it today you would earn a total of  4,727  from holding ASSA ABLOY AB or generate 17.33% return on investment over 90 days.

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

ASSA ABLOY AB  vs.  Prostatype Genomics AB

ASSA ABLOY AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ASSA ABLOY AB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ASSA ABLOY sustained solid returns over the last few months and may actually be approaching a breakup point.

Prostatype Genomics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prostatype Genomics AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with ASSA ABLOY and Prostatype Genomics

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

The idea behind ASSA ABLOY AB and Prostatype Genomics 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.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.