Correlation Between NYSE Composite and Atmus Filtration
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Atmus Filtration 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 NYSE Composite and Atmus Filtration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Atmus Filtration Technologies, you can compare the effects of market volatilities on NYSE Composite and Atmus Filtration 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 NYSE Composite with a short position of Atmus Filtration. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Atmus Filtration.
Diversification Opportunities for NYSE Composite and Atmus Filtration
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Atmus is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Atmus Filtration Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmus Filtration Tec and NYSE Composite 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 NYSE Composite are associated (or correlated) with Atmus Filtration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atmus Filtration Tec has no effect on the direction of NYSE Composite i.e., NYSE Composite and Atmus Filtration go up and down completely randomly.
Pair Corralation between NYSE Composite and Atmus Filtration
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.76 times less return on investment than Atmus Filtration. But when comparing it to its historical volatility, NYSE Composite is 3.47 times less risky than Atmus Filtration. It trades about 0.26 of its potential returns per unit of risk. Atmus Filtration Technologies is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 3,894 in Atmus Filtration Technologies on August 30, 2024 and sell it today you would earn a total of 412.00 from holding Atmus Filtration Technologies or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Atmus Filtration Technologies
Performance |
| Timeline |
NYSE Composite and Atmus Filtration Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Atmus Filtration Technologies
Pair trading matchups for Atmus Filtration
Pair Trading with NYSE Composite and Atmus Filtration
The main advantage of trading using opposite NYSE Composite and Atmus Filtration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Atmus Filtration 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 Atmus Filtration will offset losses from the drop in Atmus Filtration's long position.| NYSE Composite vs. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
| Atmus Filtration vs. BCE Inc | Atmus Filtration vs. Barrick Gold Corp | Atmus Filtration vs. Yuexiu Transport Infrastructure | Atmus Filtration vs. Chester Mining |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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