Correlation Between Ushio and Atlas Copco
Can any of the company-specific risk be diversified away by investing in both Ushio 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 Ushio and Atlas Copco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ushio Inc and Atlas Copco AB, you can compare the effects of market volatilities on Ushio 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 Ushio with a short position of Atlas Copco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ushio and Atlas Copco.
Diversification Opportunities for Ushio and Atlas Copco
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ushio and Atlas is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ushio Inc 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 Ushio 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 Ushio Inc 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 Ushio i.e., Ushio and Atlas Copco go up and down completely randomly.
Pair Corralation between Ushio and Atlas Copco
Assuming the 90 days horizon Ushio is expected to generate 1.47 times less return on investment than Atlas Copco. In addition to that, Ushio is 1.01 times more volatile than Atlas Copco AB. It trades about 0.05 of its total potential returns per unit of risk. Atlas Copco AB is currently generating about 0.07 per unit of volatility. If you would invest 945.00 in Atlas Copco AB on September 12, 2024 and sell it today you would earn a total of 508.00 from holding Atlas Copco AB or generate 53.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 49.54% |
| Values | Daily Returns |
Ushio Inc vs. Atlas Copco AB
Performance |
| Timeline |
| Ushio Inc |
| Atlas Copco AB |
Ushio and Atlas Copco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ushio and Atlas Copco
The main advantage of trading using opposite Ushio and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ushio 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.| Ushio vs. Xinjiang Goldwind Science | Ushio vs. American Superconductor | Ushio vs. Cummins | Ushio vs. Aquagold International |
| Atlas Copco vs. Xinjiang Goldwind Science | Atlas Copco vs. American Superconductor | Atlas Copco vs. Cummins | Atlas Copco 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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