Correlation Between Advanced Energy and Atkore International
Can any of the company-specific risk be diversified away by investing in both Advanced Energy and Atkore International 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 Advanced Energy and Atkore International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Energy Industries and Atkore International Group, you can compare the effects of market volatilities on Advanced Energy and Atkore International 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 Advanced Energy with a short position of Atkore International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Energy and Atkore International.
Diversification Opportunities for Advanced Energy and Atkore International
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advanced and Atkore is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Energy Industries and Atkore International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atkore International and Advanced Energy 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 Advanced Energy Industries are associated (or correlated) with Atkore International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atkore International has no effect on the direction of Advanced Energy i.e., Advanced Energy and Atkore International go up and down completely randomly.
Pair Corralation between Advanced Energy and Atkore International
Given the investment horizon of 90 days Advanced Energy Industries is expected to generate 0.82 times more return on investment than Atkore International. However, Advanced Energy Industries is 1.21 times less risky than Atkore International. It trades about 0.03 of its potential returns per unit of risk. Atkore International Group is currently generating about -0.01 per unit of risk. If you would invest 8,998 in Advanced Energy Industries on August 24, 2024 and sell it today you would earn a total of 2,521 from holding Advanced Energy Industries or generate 28.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Energy Industries vs. Atkore International Group
Performance |
| Timeline |
| Advanced Energy Indu |
| Atkore International |
Advanced Energy and Atkore International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Energy and Atkore International
The main advantage of trading using opposite Advanced Energy and Atkore International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Energy position performs unexpectedly, Atkore International 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 Atkore International will offset losses from the drop in Atkore International's long position.| Advanced Energy vs. MKS Instruments | Advanced Energy vs. Axcelis Technologies | Advanced Energy vs. Entegris | Advanced Energy vs. Cohu Inc |
| Atkore International vs. Hubbell | Atkore International vs. Enersys | Atkore International vs. Advanced Energy Industries | Atkore International vs. nVent Electric PLC |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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