Correlation Between Atlas Copco and Yokogawa Electric
Can any of the company-specific risk be diversified away by investing in both Atlas Copco and Yokogawa Electric 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 Yokogawa Electric 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 Yokogawa Electric Corp, you can compare the effects of market volatilities on Atlas Copco and Yokogawa Electric 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 Yokogawa Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and Yokogawa Electric.
Diversification Opportunities for Atlas Copco and Yokogawa Electric
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Atlas and Yokogawa is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco AB and Yokogawa Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yokogawa Electric Corp 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 Yokogawa Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yokogawa Electric Corp has no effect on the direction of Atlas Copco i.e., Atlas Copco and Yokogawa Electric go up and down completely randomly.
Pair Corralation between Atlas Copco and Yokogawa Electric
Assuming the 90 days horizon Atlas Copco AB is expected to generate 0.57 times more return on investment than Yokogawa Electric. However, Atlas Copco AB is 1.75 times less risky than Yokogawa Electric. It trades about 0.07 of its potential returns per unit of risk. Yokogawa Electric Corp is currently generating about -0.03 per unit of risk. If you would invest 1,387 in Atlas Copco AB on August 29, 2024 and sell it today you would earn a total of 189.00 from holding Atlas Copco AB or generate 13.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Copco AB vs. Yokogawa Electric Corp
Performance |
| Timeline |
| Atlas Copco AB |
| Yokogawa Electric Corp |
Atlas Copco and Yokogawa Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Copco and Yokogawa Electric
The main advantage of trading using opposite Atlas Copco and Yokogawa Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Copco position performs unexpectedly, Yokogawa Electric 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 Yokogawa Electric will offset losses from the drop in Yokogawa Electric's long position.| Atlas Copco vs. Parker Hannifin | Atlas Copco vs. Eaton PLC | Atlas Copco vs. Dover | Atlas Copco vs. Illinois Tool Works |
| Yokogawa Electric vs. Brewbilt Manufacturing | Yokogawa Electric vs. Eaton PLC | Yokogawa Electric vs. ITM Power Plc | Yokogawa Electric vs. Schneider Electric SA |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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