Correlation Between UET United and Atlas Copco
Can any of the company-specific risk be diversified away by investing in both UET United and Atlas Copco 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 UET United and Atlas Copco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UET United Electronic and Atlas Copco A, you can compare the effects of market volatilities on UET United and Atlas Copco 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 UET United with a short position of Atlas Copco. Check out your portfolio center. Please also check ongoing floating volatility patterns of UET United and Atlas Copco.
Diversification Opportunities for UET United and Atlas Copco
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between UET and Atlas is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding UET United Electronic and Atlas Copco A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Copco A and UET United 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 UET United Electronic are associated (or correlated) with Atlas Copco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Copco A has no effect on the direction of UET United i.e., UET United and Atlas Copco go up and down completely randomly.
Pair Corralation between UET United and Atlas Copco
Assuming the 90 days trading horizon UET United Electronic is expected to under-perform the Atlas Copco. In addition to that, UET United is 1.51 times more volatile than Atlas Copco A. It trades about -0.03 of its total potential returns per unit of risk. Atlas Copco A is currently generating about 0.02 per unit of volatility. If you would invest 1,367 in Atlas Copco A on September 3, 2024 and sell it today you would earn a total of 93.00 from holding Atlas Copco A or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UET United Electronic vs. Atlas Copco A
Performance |
| Timeline |
| UET United Electronic |
| Atlas Copco A |
UET United and Atlas Copco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UET United and Atlas Copco
The main advantage of trading using opposite UET United and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UET United position performs unexpectedly, Atlas Copco 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 Atlas Copco will offset losses from the drop in Atlas Copco's long position.| UET United vs. Cisco Systems | UET United vs. Cisco Systems | UET United vs. Motorola Solutions | UET United vs. Nokia |
| Atlas Copco vs. LG Electronics | Atlas Copco vs. Applied Materials | Atlas Copco vs. Goodyear Tire Rubber | Atlas Copco vs. UET United Electronic |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |