Correlation Between Biotage AB and ASSA ABLOY

Can any of the company-specific risk be diversified away by investing in both Biotage AB and ASSA ABLOY 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 Biotage AB and ASSA ABLOY into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Biotage AB and ASSA ABLOY

0.66

Correlation Coefficient

Biotage AB  ASSA ABLOY

Poor diversification

The 3 months correlation between Biotage and ASSA is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Biotage AB and ASSA ABLOY AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSA ABLOY AB and Biotage AB 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 Biotage AB are associated (or correlated) with ASSA ABLOY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSA ABLOY AB has no effect on the direction of Biotage AB i.e., Biotage AB and ASSA ABLOY go up and down completely randomly.

Pair Corralation between Biotage AB and ASSA ABLOY

Assuming the 90 days trading horizon Biotage AB is expected to generate 5.81 times less return on investment than ASSA ABLOY. But when comparing it to its historical volatility, Biotage AB is 6.19 times less risky than ASSA ABLOY. It trades about 0.14 of its potential returns per unit of risk. ASSA ABLOY AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  29,000  in ASSA ABLOY AB on April 25, 2025 and sell it today you would earn a total of  3,160  from holding ASSA ABLOY AB or generate 10.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Biotage AB  vs.  ASSA ABLOY AB

Biotage AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Biotage AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Biotage AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 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.

Pair Trading with Biotage AB and ASSA ABLOY

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

The idea behind Biotage AB and ASSA ABLOY 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.