Correlation Between Chart Industries and Atlas Copco
Can any of the company-specific risk be diversified away by investing in both Chart Industries 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 Chart Industries and Atlas Copco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chart Industries and Atlas Copco ADR, you can compare the effects of market volatilities on Chart Industries 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 Chart Industries with a short position of Atlas Copco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chart Industries and Atlas Copco.
Diversification Opportunities for Chart Industries and Atlas Copco
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chart and Atlas is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Chart Industries and Atlas Copco ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Copco ADR and Chart Industries 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 Chart Industries 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 ADR has no effect on the direction of Chart Industries i.e., Chart Industries and Atlas Copco go up and down completely randomly.
Pair Corralation between Chart Industries and Atlas Copco
Given the investment horizon of 90 days Chart Industries is expected to generate 1.89 times more return on investment than Atlas Copco. However, Chart Industries is 1.89 times more volatile than Atlas Copco ADR. It trades about 0.06 of its potential returns per unit of risk. Atlas Copco ADR is currently generating about -0.01 per unit of risk. If you would invest 13,633 in Chart Industries on August 25, 2024 and sell it today you would earn a total of 4,747 from holding Chart Industries or generate 34.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chart Industries vs. Atlas Copco ADR
Performance |
| Timeline |
| Chart Industries |
| Atlas Copco ADR |
Chart Industries and Atlas Copco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chart Industries and Atlas Copco
The main advantage of trading using opposite Chart Industries and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chart Industries 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.| Chart Industries vs. Crane NXT Co | Chart Industries vs. Donaldson | Chart Industries vs. ITT Inc | Chart Industries vs. Franklin Electric Co |
| Atlas Copco vs. Amaero International | Atlas Copco vs. Aumann AG | Atlas Copco vs. Atlas Copco AB | Atlas Copco vs. Alfa Laval AB |
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 Stocks Directory module to find actively traded stocks across global markets.
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