Correlation Between Atlas Copco and ShaMaran Petroleum
Can any of the company-specific risk be diversified away by investing in both Atlas Copco and ShaMaran Petroleum 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 ShaMaran Petroleum 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 ShaMaran Petroleum Corp, you can compare the effects of market volatilities on Atlas Copco and ShaMaran Petroleum 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 ShaMaran Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and ShaMaran Petroleum.
Diversification Opportunities for Atlas Copco and ShaMaran Petroleum
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Atlas and ShaMaran is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco AB and ShaMaran Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ShaMaran Petroleum Corp 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 ShaMaran Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ShaMaran Petroleum Corp has no effect on the direction of Atlas Copco i.e., Atlas Copco and ShaMaran Petroleum go up and down completely randomly.
Pair Corralation between Atlas Copco and ShaMaran Petroleum
Assuming the 90 days trading horizon Atlas Copco AB is expected to under-perform the ShaMaran Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, Atlas Copco AB is 2.47 times less risky than ShaMaran Petroleum. The stock trades about -0.21 of its potential returns per unit of risk. The ShaMaran Petroleum Corp is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 56.00 in ShaMaran Petroleum Corp on August 28, 2024 and sell it today you would earn a total of 39.00 from holding ShaMaran Petroleum Corp or generate 69.64% 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. ShaMaran Petroleum Corp
Performance |
| Timeline |
| Atlas Copco AB |
| ShaMaran Petroleum Corp |
Atlas Copco and ShaMaran Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Copco and ShaMaran Petroleum
The main advantage of trading using opposite Atlas Copco and ShaMaran Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Copco position performs unexpectedly, ShaMaran Petroleum 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 ShaMaran Petroleum will offset losses from the drop in ShaMaran Petroleum'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 |
| ShaMaran Petroleum vs. SolTech Energy Sweden | ShaMaran Petroleum vs. Minesto AB | ShaMaran Petroleum vs. SaltX Technology Holding | ShaMaran Petroleum vs. Impact Coatings publ |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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