Correlation Between Flowserve and ATS
Can any of the company-specific risk be diversified away by investing in both Flowserve and ATS 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 Flowserve and ATS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flowserve and ATS Corporation, you can compare the effects of market volatilities on Flowserve and ATS 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 Flowserve with a short position of ATS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flowserve and ATS.
Diversification Opportunities for Flowserve and ATS
Poor diversification
The 3 months correlation between Flowserve and ATS is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Flowserve and ATS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATS Corporation and Flowserve 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 Flowserve are associated (or correlated) with ATS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATS Corporation has no effect on the direction of Flowserve i.e., Flowserve and ATS go up and down completely randomly.
Pair Corralation between Flowserve and ATS
Considering the 90-day investment horizon Flowserve is expected to generate 0.82 times more return on investment than ATS. However, Flowserve is 1.23 times less risky than ATS. It trades about 0.1 of its potential returns per unit of risk. ATS Corporation is currently generating about 0.0 per unit of risk. If you would invest 2,921 in Flowserve on August 27, 2024 and sell it today you would earn a total of 3,179 from holding Flowserve or generate 108.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flowserve vs. ATS Corp.
Performance |
| Timeline |
| Flowserve |
| ATS Corporation |
Flowserve and ATS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flowserve and ATS
The main advantage of trading using opposite Flowserve and ATS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flowserve position performs unexpectedly, ATS 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 ATS will offset losses from the drop in ATS's long position.| Flowserve vs. Aquagold International | Flowserve vs. Morningstar Unconstrained Allocation | Flowserve vs. High Yield Municipal Fund | Flowserve vs. Thrivent High Yield |
| ATS vs. Aquagold International | ATS vs. Morningstar Unconstrained Allocation | ATS vs. High Yield Municipal Fund | ATS vs. Thrivent High Yield |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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