Correlation Between Atkore International and Legrand SA
Can any of the company-specific risk be diversified away by investing in both Atkore International and Legrand SA 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 Atkore International and Legrand SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atkore International Group and Legrand SA ADR, you can compare the effects of market volatilities on Atkore International and Legrand SA 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 Atkore International with a short position of Legrand SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atkore International and Legrand SA.
Diversification Opportunities for Atkore International and Legrand SA
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Atkore and Legrand is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Atkore International Group and Legrand SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legrand SA ADR and Atkore International 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 Atkore International Group are associated (or correlated) with Legrand SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legrand SA ADR has no effect on the direction of Atkore International i.e., Atkore International and Legrand SA go up and down completely randomly.
Pair Corralation between Atkore International and Legrand SA
Given the investment horizon of 90 days Atkore International Group is expected to generate 2.31 times more return on investment than Legrand SA. However, Atkore International is 2.31 times more volatile than Legrand SA ADR. It trades about 0.1 of its potential returns per unit of risk. Legrand SA ADR is currently generating about -0.32 per unit of risk. If you would invest 8,821 in Atkore International Group on August 29, 2024 and sell it today you would earn a total of 674.00 from holding Atkore International Group or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Atkore International Group vs. Legrand SA ADR
Performance |
| Timeline |
| Atkore International |
| Legrand SA ADR |
Atkore International and Legrand SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atkore International and Legrand SA
The main advantage of trading using opposite Atkore International and Legrand SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atkore International position performs unexpectedly, Legrand SA 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 Legrand SA will offset losses from the drop in Legrand SA's long position.| Atkore International vs. Hubbell | Atkore International vs. Enersys | Atkore International vs. Advanced Energy Industries | Atkore International vs. nVent Electric PLC |
| Legrand SA vs. Novonix Ltd ADR | Legrand SA vs. Ilika plc | Legrand SA vs. FuelPositive Corp | Legrand SA vs. Novonix |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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