Correlation Between Atlas Copco and Aumann AG
Can any of the company-specific risk be diversified away by investing in both Atlas Copco and Aumann AG 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 Aumann AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Copco ADR and Aumann AG, you can compare the effects of market volatilities on Atlas Copco and Aumann AG 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 Aumann AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and Aumann AG.
Diversification Opportunities for Atlas Copco and Aumann AG
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Atlas and Aumann is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco ADR and Aumann AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aumann AG 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 ADR are associated (or correlated) with Aumann AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aumann AG has no effect on the direction of Atlas Copco i.e., Atlas Copco and Aumann AG go up and down completely randomly.
Pair Corralation between Atlas Copco and Aumann AG
Assuming the 90 days horizon Atlas Copco ADR is expected to generate 0.92 times more return on investment than Aumann AG. However, Atlas Copco ADR is 1.09 times less risky than Aumann AG. It trades about -0.07 of its potential returns per unit of risk. Aumann AG is currently generating about -0.16 per unit of risk. If you would invest 1,668 in Atlas Copco ADR on September 3, 2024 and sell it today you would lose (262.00) from holding Atlas Copco ADR or give up 15.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Copco ADR vs. Aumann AG
Performance |
| Timeline |
| Atlas Copco ADR |
| Aumann AG |
Atlas Copco and Aumann AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Copco and Aumann AG
The main advantage of trading using opposite Atlas Copco and Aumann AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Copco position performs unexpectedly, Aumann AG 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 Aumann AG will offset losses from the drop in Aumann AG's long position.| Atlas Copco vs. TOMI Environmental Solutions | Atlas Copco vs. SCOR PK | Atlas Copco vs. HUMANA INC | Atlas Copco vs. Aquagold International |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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