Correlation Between Assa Abloy and Legrand SA
Can any of the company-specific risk be diversified away by investing in both Assa Abloy and Legrand SA 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 Legrand SA 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 Legrand SA, you can compare the effects of market volatilities on Assa Abloy and Legrand SA 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 Legrand SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assa Abloy and Legrand SA.
Diversification Opportunities for Assa Abloy and Legrand SA
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Assa and Legrand is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Assa Abloy AB and Legrand SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legrand SA 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 Legrand SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legrand SA has no effect on the direction of Assa Abloy i.e., Assa Abloy and Legrand SA go up and down completely randomly.
Pair Corralation between Assa Abloy and Legrand SA
Assuming the 90 days horizon Assa Abloy AB is expected to generate 0.59 times more return on investment than Legrand SA. However, Assa Abloy AB is 1.68 times less risky than Legrand SA. It trades about 0.07 of its potential returns per unit of risk. Legrand SA is currently generating about 0.01 per unit of risk. If you would invest 1,745 in Assa Abloy AB on August 20, 2025 and sell it today you would earn a total of 95.00 from holding Assa Abloy AB or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Assa Abloy AB vs. Legrand SA
Performance |
| Timeline |
| Assa Abloy AB |
| Legrand SA |
Assa Abloy and Legrand SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assa Abloy and Legrand SA
The main advantage of trading using opposite Assa Abloy and Legrand SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assa Abloy position performs unexpectedly, Legrand SA 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 Legrand SA will offset losses from the drop in Legrand SA's long position.| Assa Abloy vs. Experian plc PK | Assa Abloy vs. Experian PLC | Assa Abloy vs. Aena SME SA | Assa Abloy vs. Legrand SA |
| Legrand SA vs. Assa Abloy AB | Legrand SA vs. Experian PLC | Legrand SA vs. Experian plc PK | Legrand SA vs. Aena SME SA |
Check out your portfolio center.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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