Correlation Between ENGIE Eps and Atlas Copco

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Can any of the company-specific risk be diversified away by investing in both ENGIE Eps 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 ENGIE Eps and Atlas Copco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENGIE Eps SA and Atlas Copco A, you can compare the effects of market volatilities on ENGIE Eps 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 ENGIE Eps with a short position of Atlas Copco. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENGIE Eps and Atlas Copco.

Diversification Opportunities for ENGIE Eps and Atlas Copco

-0.64
  Correlation Coefficient

Excellent diversification

The 3 months correlation between ENGIE and Atlas is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding ENGIE Eps SA 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 ENGIE Eps 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 ENGIE Eps SA 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 ENGIE Eps i.e., ENGIE Eps and Atlas Copco go up and down completely randomly.

Pair Corralation between ENGIE Eps and Atlas Copco

If you would invest  1,490  in Atlas Copco A on October 17, 2024 and sell it today you would earn a total of  0.00  from holding Atlas Copco A or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy5.88%
ValuesDaily Returns

ENGIE Eps SA  vs.  Atlas Copco A

 Performance 
       Timeline  
ENGIE Eps SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ENGIE Eps SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ENGIE Eps is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
Atlas Copco A 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Atlas Copco A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Atlas Copco is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

ENGIE Eps and Atlas Copco Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ENGIE Eps and Atlas Copco

The main advantage of trading using opposite ENGIE Eps and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENGIE Eps 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.
The idea behind ENGIE Eps SA and Atlas Copco A pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Transaction History module to view history of all your transactions and understand their impact on performance.

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