Correlation Between Atlas Copco and CoinShares International
Can any of the company-specific risk be diversified away by investing in both Atlas Copco and CoinShares 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 Atlas Copco and CoinShares International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Copco AB and CoinShares International, you can compare the effects of market volatilities on Atlas Copco and CoinShares 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 Atlas Copco with a short position of CoinShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and CoinShares International.
Diversification Opportunities for Atlas Copco and CoinShares International
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Atlas and CoinShares is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco AB and CoinShares International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoinShares International 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 AB are associated (or correlated) with CoinShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoinShares International has no effect on the direction of Atlas Copco i.e., Atlas Copco and CoinShares International go up and down completely randomly.
Pair Corralation between Atlas Copco and CoinShares International
Assuming the 90 days trading horizon Atlas Copco is expected to generate 6.11 times less return on investment than CoinShares International. But when comparing it to its historical volatility, Atlas Copco AB is 2.61 times less risky than CoinShares International. It trades about 0.04 of its potential returns per unit of risk. CoinShares International is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,875 in CoinShares International on August 31, 2024 and sell it today you would earn a total of 5,395 from holding CoinShares International or generate 187.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Copco AB vs. CoinShares International
Performance |
| Timeline |
| Atlas Copco AB |
| CoinShares International |
Atlas Copco and CoinShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Copco and CoinShares International
The main advantage of trading using opposite Atlas Copco and CoinShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Copco position performs unexpectedly, CoinShares 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 CoinShares International will offset losses from the drop in CoinShares International's long position.| Atlas Copco vs. Sandvik AB | Atlas Copco vs. ASSA ABLOY AB | Atlas Copco vs. Alfa Laval AB | Atlas Copco vs. AB SKF |
| CoinShares International vs. Media and Games | CoinShares International vs. KABE Group AB | CoinShares International vs. IAR Systems Group | CoinShares International vs. Norva24 Group AB |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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