Correlation Between Lion One and Atlas Copco
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Atlas Copco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Atlas Copco A, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Atlas Copco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Atlas Copco.
Diversification Opportunities for Lion One and Atlas Copco
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lion and Atlas is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals 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 Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and Atlas Copco go up and down completely randomly.
Pair Corralation between Lion One and Atlas Copco
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Atlas Copco. In addition to that, Lion One is 1.6 times more volatile than Atlas Copco A. It trades about -0.05 of its total potential returns per unit of risk. Atlas Copco A is currently generating about 0.04 per unit of volatility. If you would invest 1,170 in Atlas Copco A on September 12, 2024 and sell it today you would earn a total of 360.00 from holding Atlas Copco A or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Atlas Copco A
Performance |
| Timeline |
| Lion One Metals |
| Atlas Copco A |
Lion One and Atlas Copco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Atlas Copco
The main advantage of trading using opposite Lion One and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. Franco Nevada | Lion One vs. Superior Plus Corp | Lion One vs. SIVERS SEMICONDUCTORS AB | Lion One vs. Norsk Hydro ASA |
| Atlas Copco vs. Ping An Insurance | Atlas Copco vs. REVO INSURANCE SPA | Atlas Copco vs. Lion One Metals | Atlas Copco vs. ZURICH INSURANCE GROUP |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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