Correlation Between MSA Safety and ATWEC Technologies
Can any of the company-specific risk be diversified away by investing in both MSA Safety and ATWEC Technologies 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 MSA Safety and ATWEC Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSA Safety and ATWEC Technologies, you can compare the effects of market volatilities on MSA Safety and ATWEC Technologies 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 MSA Safety with a short position of ATWEC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSA Safety and ATWEC Technologies.
Diversification Opportunities for MSA Safety and ATWEC Technologies
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MSA and ATWEC is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding MSA Safety and ATWEC Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATWEC Technologies and MSA Safety 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 MSA Safety are associated (or correlated) with ATWEC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATWEC Technologies has no effect on the direction of MSA Safety i.e., MSA Safety and ATWEC Technologies go up and down completely randomly.
Pair Corralation between MSA Safety and ATWEC Technologies
Considering the 90-day investment horizon MSA Safety is expected to generate 0.08 times more return on investment than ATWEC Technologies. However, MSA Safety is 12.52 times less risky than ATWEC Technologies. It trades about 0.23 of its potential returns per unit of risk. ATWEC Technologies is currently generating about -0.09 per unit of risk. If you would invest 16,315 in MSA Safety on September 2, 2024 and sell it today you would earn a total of 1,066 from holding MSA Safety or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
MSA Safety vs. ATWEC Technologies
Performance |
| Timeline |
| MSA Safety |
| ATWEC Technologies |
MSA Safety and ATWEC Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSA Safety and ATWEC Technologies
The main advantage of trading using opposite MSA Safety and ATWEC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSA Safety position performs unexpectedly, ATWEC Technologies 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 ATWEC Technologies will offset losses from the drop in ATWEC Technologies' long position.| MSA Safety vs. Allegion PLC | MSA Safety vs. Resideo Technologies | MSA Safety vs. NL Industries | MSA Safety vs. Brady |
| ATWEC Technologies vs. Allegion PLC | ATWEC Technologies vs. MSA Safety | ATWEC Technologies vs. HUMANA INC | ATWEC Technologies vs. Aquagold International |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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