Correlation Between Atlas Copco and Cyber Security
Can any of the company-specific risk be diversified away by investing in both Atlas Copco and Cyber Security 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 Cyber Security 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 Cyber Security 1, you can compare the effects of market volatilities on Atlas Copco and Cyber Security 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 Cyber Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and Cyber Security.
Diversification Opportunities for Atlas Copco and Cyber Security
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atlas and Cyber is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco AB and Cyber Security 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyber Security 1 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 Cyber Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyber Security 1 has no effect on the direction of Atlas Copco i.e., Atlas Copco and Cyber Security go up and down completely randomly.
Pair Corralation between Atlas Copco and Cyber Security
Assuming the 90 days trading horizon Atlas Copco AB is expected to generate 0.17 times more return on investment than Cyber Security. However, Atlas Copco AB is 6.03 times less risky than Cyber Security. It trades about -0.06 of its potential returns per unit of risk. Cyber Security 1 is currently generating about -0.23 per unit of risk. If you would invest 15,205 in Atlas Copco AB on September 24, 2024 and sell it today you would lose (225.00) from holding Atlas Copco AB or give up 1.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Copco AB vs. Cyber Security 1
Performance |
| Timeline |
| Atlas Copco AB |
| Cyber Security 1 |
Atlas Copco and Cyber Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Copco and Cyber Security
The main advantage of trading using opposite Atlas Copco and Cyber Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Copco position performs unexpectedly, Cyber Security 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 Cyber Security will offset losses from the drop in Cyber Security's long position.| Atlas Copco vs. Atlas Copco AB | Atlas Copco vs. Trelleborg AB | Atlas Copco vs. Troax Group AB | Atlas Copco vs. Metacon 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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