Correlation Between Atlas Copco and Siemens Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Atlas Copco and Siemens Aktiengesellscha 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 Atlas Copco and Siemens Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Copco A and Siemens Aktiengesellschaft, you can compare the effects of market volatilities on Atlas Copco and Siemens Aktiengesellscha 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 Atlas Copco with a short position of Siemens Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and Siemens Aktiengesellscha.
Diversification Opportunities for Atlas Copco and Siemens Aktiengesellscha
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Atlas and Siemens is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco A and Siemens Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Aktiengesellscha and Atlas Copco 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 Atlas Copco A are associated (or correlated) with Siemens Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Aktiengesellscha has no effect on the direction of Atlas Copco i.e., Atlas Copco and Siemens Aktiengesellscha go up and down completely randomly.
Pair Corralation between Atlas Copco and Siemens Aktiengesellscha
Assuming the 90 days horizon Atlas Copco A is expected to generate 2.24 times more return on investment than Siemens Aktiengesellscha. However, Atlas Copco is 2.24 times more volatile than Siemens Aktiengesellschaft. It trades about 0.03 of its potential returns per unit of risk. Siemens Aktiengesellschaft is currently generating about 0.07 per unit of risk. If you would invest 1,131 in Atlas Copco A on September 5, 2024 and sell it today you would earn a total of 319.00 from holding Atlas Copco A or generate 28.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Atlas Copco A vs. Siemens Aktiengesellschaft
Performance |
| Timeline |
| Atlas Copco A |
| Siemens Aktiengesellscha |
Atlas Copco and Siemens Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Copco and Siemens Aktiengesellscha
The main advantage of trading using opposite Atlas Copco and Siemens Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Copco position performs unexpectedly, Siemens Aktiengesellscha 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 Siemens Aktiengesellscha will offset losses from the drop in Siemens Aktiengesellscha's long position.| Atlas Copco vs. TITANIUM TRANSPORTGROUP | Atlas Copco vs. Magic Software Enterprises | Atlas Copco vs. BII Railway Transportation | Atlas Copco vs. TEXAS ROADHOUSE |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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