Correlation Between ASSA ABLOY and Knightscope

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

Diversification Opportunities for ASSA ABLOY and Knightscope

-0.86

Correlation Coefficient

ASSA ABLOY  Knightscope

Pay attention - limited upside

The 3 months correlation between ASSA and Knightscope is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding ASSA ABLOY AB and Knightscope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knightscope 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 Knightscope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knightscope has no effect on the direction of ASSA ABLOY i.e., ASSA ABLOY and Knightscope go up and down completely randomly.

Pair Corralation between ASSA ABLOY and Knightscope

Assuming the 90 days horizon ASSA ABLOY AB is expected to generate 0.13 times more return on investment than Knightscope. However, ASSA ABLOY AB is 7.83 times less risky than Knightscope. It trades about 0.2 of its potential returns per unit of risk. Knightscope is currently generating about -0.29 per unit of risk. If you would invest  2,864  in ASSA ABLOY AB on December 21, 2024 and sell it today you would earn a total of  276.00  from holding ASSA ABLOY AB or generate 9.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.77%
Values	Daily Returns

ASSA ABLOY AB  vs.  Knightscope

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 nearly weak basic indicators, ASSA ABLOY may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Knightscope

Risk-Adjusted Performance

Very Weak

Over the last 90 days Knightscope has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with ASSA ABLOY and Knightscope

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

The idea behind ASSA ABLOY AB and Knightscope 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.