Correlation Between KONE Oyj and Atlas Copco
Can any of the company-specific risk be diversified away by investing in both KONE Oyj 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 KONE Oyj and Atlas Copco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KONE Oyj and Atlas Copco AB, you can compare the effects of market volatilities on KONE Oyj 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 KONE Oyj with a short position of Atlas Copco. Check out your portfolio center. Please also check ongoing floating volatility patterns of KONE Oyj and Atlas Copco.
Diversification Opportunities for KONE Oyj and Atlas Copco
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KONE and Atlas is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding KONE Oyj and Atlas Copco AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Copco AB and KONE Oyj 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 KONE Oyj 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 AB has no effect on the direction of KONE Oyj i.e., KONE Oyj and Atlas Copco go up and down completely randomly.
Pair Corralation between KONE Oyj and Atlas Copco
Assuming the 90 days horizon KONE Oyj is expected to under-perform the Atlas Copco. But the pink sheet apears to be less risky and, when comparing its historical volatility, KONE Oyj is 1.56 times less risky than Atlas Copco. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Atlas Copco AB is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,728 in Atlas Copco AB on August 29, 2024 and sell it today you would lose (130.00) from holding Atlas Copco AB or give up 7.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KONE Oyj vs. Atlas Copco AB
Performance |
| Timeline |
| KONE Oyj |
| Atlas Copco AB |
KONE Oyj and Atlas Copco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KONE Oyj and Atlas Copco
The main advantage of trading using opposite KONE Oyj and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KONE Oyj 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.| KONE Oyj vs. Spirax Sarco Engineering PLC | KONE Oyj vs. Atlas Copco ADR | KONE Oyj vs. Vestas Wind Systems | KONE Oyj vs. IDEX Corporation |
| Atlas Copco vs. Parker Hannifin | Atlas Copco vs. Eaton PLC | Atlas Copco vs. Dover | Atlas Copco vs. Illinois Tool Works |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |