Correlation Between Atlas Copco and Nidec
Can any of the company-specific risk be diversified away by investing in both Atlas Copco and Nidec 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 Nidec 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 Nidec, you can compare the effects of market volatilities on Atlas Copco and Nidec 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 Nidec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and Nidec.
Diversification Opportunities for Atlas Copco and Nidec
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Atlas and Nidec is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco ADR and Nidec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nidec 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 Nidec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nidec has no effect on the direction of Atlas Copco i.e., Atlas Copco and Nidec go up and down completely randomly.
Pair Corralation between Atlas Copco and Nidec
Assuming the 90 days horizon Atlas Copco ADR is expected to generate 0.91 times more return on investment than Nidec. However, Atlas Copco ADR is 1.1 times less risky than Nidec. It trades about 0.03 of its potential returns per unit of risk. Nidec is currently generating about -0.08 per unit of risk. If you would invest 1,093 in Atlas Copco ADR on August 29, 2024 and sell it today you would earn a total of 283.00 from holding Atlas Copco ADR or generate 25.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 8.67% |
| Values | Daily Returns |
Atlas Copco ADR vs. Nidec
Performance |
| Timeline |
| Atlas Copco ADR |
| Nidec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Atlas Copco and Nidec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Copco and Nidec
The main advantage of trading using opposite Atlas Copco and Nidec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Copco position performs unexpectedly, Nidec 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 Nidec will offset losses from the drop in Nidec'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 |
| Nidec vs. Eaton PLC | Nidec vs. Yokogawa Electric Corp | Nidec vs. Brewbilt Manufacturing | Nidec vs. Vestas Wind Systems |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |