Correlation Between Atlas Copco and Kone Oyj
Can any of the company-specific risk be diversified away by investing in both Atlas Copco and Kone Oyj 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 Kone Oyj 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 Kone Oyj ADR, you can compare the effects of market volatilities on Atlas Copco and Kone Oyj 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 Kone Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and Kone Oyj.
Diversification Opportunities for Atlas Copco and Kone Oyj
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Atlas and Kone is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco ADR and Kone Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kone Oyj ADR 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 Kone Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kone Oyj ADR has no effect on the direction of Atlas Copco i.e., Atlas Copco and Kone Oyj go up and down completely randomly.
Pair Corralation between Atlas Copco and Kone Oyj
Assuming the 90 days horizon Atlas Copco ADR is expected to generate 1.16 times more return on investment than Kone Oyj. However, Atlas Copco is 1.16 times more volatile than Kone Oyj ADR. It trades about 0.06 of its potential returns per unit of risk. Kone Oyj ADR is currently generating about 0.04 per unit of risk. If you would invest 1,101 in Atlas Copco ADR on September 12, 2024 and sell it today you would earn a total of 337.00 from holding Atlas Copco ADR or generate 30.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Copco ADR vs. Kone Oyj ADR
Performance |
| Timeline |
| Atlas Copco ADR |
| Kone Oyj ADR |
Atlas Copco and Kone Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Copco and Kone Oyj
The main advantage of trading using opposite Atlas Copco and Kone Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Copco position performs unexpectedly, Kone Oyj 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 Kone Oyj will offset losses from the drop in Kone Oyj's long position.| Atlas Copco vs. Amaero International | Atlas Copco vs. Aumann AG | Atlas Copco vs. Atlas Copco AB | Atlas Copco vs. Alfa Laval AB |
| Kone Oyj vs. Generac Holdings | Kone Oyj vs. Atlas Copco ADR | Kone Oyj vs. John Bean Technologies | Kone Oyj vs. Franklin Electric Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |