Correlation Between Securitas and Atlas Copco
Can any of the company-specific risk be diversified away by investing in both Securitas 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 Securitas and Atlas Copco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Securitas AB and Atlas Copco AB, you can compare the effects of market volatilities on Securitas 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 Securitas with a short position of Atlas Copco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Securitas and Atlas Copco.
Diversification Opportunities for Securitas and Atlas Copco
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Securitas and Atlas is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Securitas 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 Securitas 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 Securitas 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 Securitas i.e., Securitas and Atlas Copco go up and down completely randomly.
Pair Corralation between Securitas and Atlas Copco
Assuming the 90 days trading horizon Securitas AB is expected to generate 0.97 times more return on investment than Atlas Copco. However, Securitas AB is 1.04 times less risky than Atlas Copco. It trades about 0.08 of its potential returns per unit of risk. Atlas Copco AB is currently generating about 0.04 per unit of risk. If you would invest 7,847 in Securitas AB on September 2, 2024 and sell it today you would earn a total of 5,948 from holding Securitas AB or generate 75.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Securitas AB vs. Atlas Copco AB
Performance |
| Timeline |
| Securitas AB |
| Atlas Copco AB |
Securitas and Atlas Copco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Securitas and Atlas Copco
The main advantage of trading using opposite Securitas and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Securitas 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.| Securitas vs. Sprint Bioscience AB | Securitas vs. Acarix AS | Securitas vs. Annexin Pharmaceuticals AB | Securitas vs. KABE Group AB |
| Atlas Copco vs. Sandvik AB | Atlas Copco vs. AB SKF | Atlas Copco vs. Alfa Laval AB | Atlas Copco vs. ASSA ABLOY AB |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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