Correlation Between Atlas Copco and Zenicor Medical
Can any of the company-specific risk be diversified away by investing in both Atlas Copco and Zenicor Medical 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 Zenicor Medical 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 Zenicor Medical Systems, you can compare the effects of market volatilities on Atlas Copco and Zenicor Medical 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 Zenicor Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and Zenicor Medical.
Diversification Opportunities for Atlas Copco and Zenicor Medical
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Atlas and Zenicor is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco AB and Zenicor Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zenicor Medical Systems 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 Zenicor Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zenicor Medical Systems has no effect on the direction of Atlas Copco i.e., Atlas Copco and Zenicor Medical go up and down completely randomly.
Pair Corralation between Atlas Copco and Zenicor Medical
Assuming the 90 days trading horizon Atlas Copco AB is expected to generate 0.4 times more return on investment than Zenicor Medical. However, Atlas Copco AB is 2.52 times less risky than Zenicor Medical. It trades about -0.02 of its potential returns per unit of risk. Zenicor Medical Systems is currently generating about -0.11 per unit of risk. If you would invest 15,520 in Atlas Copco AB on September 2, 2024 and sell it today you would lose (110.00) from holding Atlas Copco AB or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Copco AB vs. Zenicor Medical Systems
Performance |
| Timeline |
| Atlas Copco AB |
| Zenicor Medical Systems |
Atlas Copco and Zenicor Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Copco and Zenicor Medical
The main advantage of trading using opposite Atlas Copco and Zenicor Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Copco position performs unexpectedly, Zenicor Medical 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 Zenicor Medical will offset losses from the drop in Zenicor Medical'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 |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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