Correlation Between Metacon AB and Atlas Copco

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Can any of the company-specific risk be diversified away by investing in both Metacon AB 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 Metacon AB and Atlas Copco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metacon AB and Atlas Copco AB, you can compare the effects of market volatilities on Metacon AB 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 Metacon AB with a short position of Atlas Copco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metacon AB and Atlas Copco.

Diversification Opportunities for Metacon AB and Atlas Copco

0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Metacon and Atlas is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Metacon AB 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 Metacon AB 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 Metacon AB 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 Metacon AB i.e., Metacon AB and Atlas Copco go up and down completely randomly.

Pair Corralation between Metacon AB and Atlas Copco

If you would invest  0.00  in Metacon AB on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Metacon AB or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy5.88%
ValuesDaily Returns

Metacon AB  vs.  Atlas Copco AB

 Performance 
       Timeline  
Metacon AB 

Risk-Adjusted Performance

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Over the last 90 days Metacon AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Atlas Copco AB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Atlas Copco AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Metacon AB and Atlas Copco Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Metacon AB and Atlas Copco

The main advantage of trading using opposite Metacon AB and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metacon AB 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.
The idea behind Metacon AB and Atlas Copco AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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