Correlation Between PT Steel and Atlas Copco
Can any of the company-specific risk be diversified away by investing in both PT Steel 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 PT Steel and Atlas Copco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Steel Pipe and Atlas Copco A, you can compare the effects of market volatilities on PT Steel 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 PT Steel with a short position of Atlas Copco. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Steel and Atlas Copco.
Diversification Opportunities for PT Steel and Atlas Copco
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between S08 and Atlas is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding PT Steel Pipe 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 PT Steel 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 PT Steel Pipe 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 PT Steel i.e., PT Steel and Atlas Copco go up and down completely randomly.
Pair Corralation between PT Steel and Atlas Copco
Assuming the 90 days horizon PT Steel is expected to generate 1.76 times less return on investment than Atlas Copco. In addition to that, PT Steel is 2.77 times more volatile than Atlas Copco A. It trades about 0.04 of its total potential returns per unit of risk. Atlas Copco A is currently generating about 0.19 per unit of volatility. If you would invest 1,440 in Atlas Copco A on October 23, 2024 and sell it today you would earn a total of 140.00 from holding Atlas Copco A or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
PT Steel Pipe vs. Atlas Copco A
Performance |
| Timeline |
| PT Steel Pipe |
| Atlas Copco A |
PT Steel and Atlas Copco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Steel and Atlas Copco
The main advantage of trading using opposite PT Steel and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Steel 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.| PT Steel vs. Ringmetall SE | PT Steel vs. British American Tobacco | PT Steel vs. UNIQA INSURANCE GR | PT Steel vs. Stag Industrial |
| Atlas Copco vs. Firan Technology Group | Atlas Copco vs. SCOTT TECHNOLOGY | Atlas Copco vs. Casio Computer CoLtd | Atlas Copco vs. AXWAY SOFTWARE EO |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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