Correlation Between Atlas Copco and Autoliv
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By analyzing existing cross correlation between Atlas Copco AB and Autoliv, you can compare the effects of market volatilities on Atlas Copco and Autoliv 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 Autoliv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and Autoliv.
Diversification Opportunities for Atlas Copco and Autoliv
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Atlas and Autoliv is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco AB and Autoliv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autoliv 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 Autoliv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autoliv has no effect on the direction of Atlas Copco i.e., Atlas Copco and Autoliv go up and down completely randomly.
Pair Corralation between Atlas Copco and Autoliv
Assuming the 90 days trading horizon Atlas Copco is expected to generate 1.06 times less return on investment than Autoliv. But when comparing it to its historical volatility, Atlas Copco AB is 1.08 times less risky than Autoliv. It trades about 0.04 of its potential returns per unit of risk. Autoliv is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 79,653 in Autoliv on September 2, 2024 and sell it today you would earn a total of 28,347 from holding Autoliv or generate 35.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Copco AB vs. Autoliv
Performance |
| Timeline |
| Atlas Copco AB |
| Autoliv |
Atlas Copco and Autoliv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Copco and Autoliv
The main advantage of trading using opposite Atlas Copco and Autoliv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Copco position performs unexpectedly, Autoliv 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 Autoliv will offset losses from the drop in Autoliv's long position.| Atlas Copco vs. Sandvik AB | Atlas Copco vs. AB SKF | Atlas Copco vs. Alfa Laval AB | Atlas Copco vs. ASSA ABLOY AB |
| Autoliv vs. Episurf Medical AB | Autoliv vs. Online Brands Nordic | Autoliv vs. Scandinavian Enviro Systems | Autoliv vs. Acconeer 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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