Correlation Between Atlas Copco and OptiCept Technologies
Can any of the company-specific risk be diversified away by investing in both Atlas Copco and OptiCept Technologies 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 OptiCept Technologies 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 OptiCept Technologies AB, you can compare the effects of market volatilities on Atlas Copco and OptiCept Technologies 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 OptiCept Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and OptiCept Technologies.
Diversification Opportunities for Atlas Copco and OptiCept Technologies
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atlas and OptiCept is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco AB and OptiCept Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiCept Technologies 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 OptiCept Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiCept Technologies has no effect on the direction of Atlas Copco i.e., Atlas Copco and OptiCept Technologies go up and down completely randomly.
Pair Corralation between Atlas Copco and OptiCept Technologies
Assuming the 90 days trading horizon Atlas Copco is expected to generate 1.84 times less return on investment than OptiCept Technologies. But when comparing it to its historical volatility, Atlas Copco AB is 1.67 times less risky than OptiCept Technologies. It trades about 0.11 of its potential returns per unit of risk. OptiCept Technologies AB is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 501.00 in OptiCept Technologies AB on September 13, 2024 and sell it today you would earn a total of 20.00 from holding OptiCept Technologies AB or generate 3.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Atlas Copco AB vs. OptiCept Technologies AB
Performance |
| Timeline |
| Atlas Copco AB |
| OptiCept Technologies |
Atlas Copco and OptiCept Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Copco and OptiCept Technologies
The main advantage of trading using opposite Atlas Copco and OptiCept Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Copco position performs unexpectedly, OptiCept Technologies 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 OptiCept Technologies will offset losses from the drop in OptiCept Technologies' long position.| Atlas Copco vs. Sandvik AB | Atlas Copco vs. AB SKF | Atlas Copco vs. Alfa Laval AB | Atlas Copco vs. ASSA ABLOY AB |
| OptiCept Technologies vs. Atlas Copco AB | OptiCept Technologies vs. Atlas Copco AB | OptiCept Technologies vs. Trelleborg AB | OptiCept Technologies vs. Troax 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 CEOs Directory module to screen CEOs from public companies around the world.
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