Correlation Between ASSA ABLOY and SinterCast

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

Diversification Opportunities for ASSA ABLOY and SinterCast

0.52

Correlation Coefficient

ASSA ABLOY  SinterCast

Very weak diversification

The 3 months correlation between ASSA and SinterCast is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding ASSA ABLOY AB and SinterCast AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SinterCast AB 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 SinterCast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SinterCast AB has no effect on the direction of ASSA ABLOY i.e., ASSA ABLOY and SinterCast go up and down completely randomly.

Pair Corralation between ASSA ABLOY and SinterCast

Assuming the 90 days trading horizon ASSA ABLOY AB is expected to generate 1.04 times more return on investment than SinterCast. However, ASSA ABLOY is 1.04 times more volatile than SinterCast AB. It trades about 0.19 of its potential returns per unit of risk. SinterCast AB is currently generating about 0.17 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 Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

ASSA ABLOY AB  vs.  SinterCast 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.

SinterCast AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SinterCast AB are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SinterCast unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASSA ABLOY and SinterCast

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

The idea behind ASSA ABLOY AB and SinterCast 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.