Correlation Between ASSA ABLOY and SpectraCure

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

Diversification Opportunities for ASSA ABLOY and SpectraCure

-0.68

Correlation Coefficient

ASSA ABLOY  SpectraCure

Excellent diversification

The 3 months correlation between ASSA and SpectraCure is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding ASSA ABLOY AB and SpectraCure AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpectraCure 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 SpectraCure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpectraCure AB has no effect on the direction of ASSA ABLOY i.e., ASSA ABLOY and SpectraCure go up and down completely randomly.

Pair Corralation between ASSA ABLOY and SpectraCure

Assuming the 90 days trading horizon ASSA ABLOY AB is expected to generate 0.06 times more return on investment than SpectraCure. However, ASSA ABLOY AB is 16.23 times less risky than SpectraCure. It trades about 0.14 of its potential returns per unit of risk. SpectraCure AB is currently generating about -0.07 per unit of risk. If you would invest  28,035  in ASSA ABLOY AB on April 23, 2025 and sell it today you would earn a total of  3,505  from holding ASSA ABLOY AB or generate 12.5% return on investment over 90 days.

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

ASSA ABLOY AB  vs.  SpectraCure 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 11 (%) 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.

SpectraCure AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days SpectraCure AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic 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 SpectraCure

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

The idea behind ASSA ABLOY AB and SpectraCure 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.