Correlation Between Atlas Copco and Xinjiang Goldwind
Can any of the company-specific risk be diversified away by investing in both Atlas Copco and Xinjiang Goldwind 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 Xinjiang Goldwind 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 Xinjiang Goldwind Science, you can compare the effects of market volatilities on Atlas Copco and Xinjiang Goldwind 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 Xinjiang Goldwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and Xinjiang Goldwind.
Diversification Opportunities for Atlas Copco and Xinjiang Goldwind
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atlas and Xinjiang is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco AB and Xinjiang Goldwind Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Goldwind Science 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 Xinjiang Goldwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Goldwind Science has no effect on the direction of Atlas Copco i.e., Atlas Copco and Xinjiang Goldwind go up and down completely randomly.
Pair Corralation between Atlas Copco and Xinjiang Goldwind
If you would invest 1,576 in Atlas Copco AB on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Atlas Copco AB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Atlas Copco AB vs. Xinjiang Goldwind Science
Performance |
| Timeline |
| Atlas Copco AB |
| Xinjiang Goldwind Science |
Atlas Copco and Xinjiang Goldwind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Copco and Xinjiang Goldwind
The main advantage of trading using opposite Atlas Copco and Xinjiang Goldwind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Copco position performs unexpectedly, Xinjiang Goldwind 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 Xinjiang Goldwind will offset losses from the drop in Xinjiang Goldwind's long position.| Atlas Copco vs. Parker Hannifin | Atlas Copco vs. Eaton PLC | Atlas Copco vs. Dover | Atlas Copco vs. Illinois Tool Works |
| Xinjiang Goldwind vs. Shanghai Electric Group | Xinjiang Goldwind vs. American Superconductor | Xinjiang Goldwind vs. Cummins |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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