Correlation Between Atlas Copco and Komori
Can any of the company-specific risk be diversified away by investing in both Atlas Copco and Komori 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 Komori 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 Komori, you can compare the effects of market volatilities on Atlas Copco and Komori 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 Komori. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and Komori.
Diversification Opportunities for Atlas Copco and Komori
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Atlas and Komori is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco AB and Komori in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komori 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 Komori. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komori has no effect on the direction of Atlas Copco i.e., Atlas Copco and Komori go up and down completely randomly.
Pair Corralation between Atlas Copco and Komori
Assuming the 90 days horizon Atlas Copco is expected to generate 5.6 times less return on investment than Komori. But when comparing it to its historical volatility, Atlas Copco AB is 3.51 times less risky than Komori. It trades about 0.1 of its potential returns per unit of risk. Komori is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 629.00 in Komori on September 13, 2024 and sell it today you would earn a total of 70.00 from holding Komori or generate 11.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 2.23% |
| Values | Daily Returns |
Atlas Copco AB vs. Komori
Performance |
| Timeline |
| Atlas Copco AB |
| Komori |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Atlas Copco and Komori Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Copco and Komori
The main advantage of trading using opposite Atlas Copco and Komori positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Copco position performs unexpectedly, Komori 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 Komori will offset losses from the drop in Komori's long position.| Atlas Copco vs. Xinjiang Goldwind Science | Atlas Copco vs. American Superconductor | Atlas Copco vs. Cummins | Atlas Copco vs. Aquagold International |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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