Correlation Between Atlas Copco and Komori

Can any of the company-specific risk be diversified away by investing in both Atlas Copco and Komori 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 Atlas Copco and Komori into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atlas Copco AB and Komori, you can compare the effects of market volatilities on Atlas Copco and Komori 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 Atlas Copco with a short position of Komori. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and Komori.

Diversification Opportunities for Atlas Copco and Komori

-0.21

Correlation Coefficient

Atlas Copco  Komori

Very good diversification

The 3 months correlation between Atlas and Komori is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco AB and Komori in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komori and Atlas Copco 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 Atlas Copco AB are associated (or correlated) with Komori. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komori has no effect on the direction of Atlas Copco i.e., Atlas Copco and Komori go up and down completely randomly.

Pair Corralation between Atlas Copco and Komori

If you would invest  1,437  in Atlas Copco AB on September 14, 2024 and sell it today you would earn a total of  16.00  from holding Atlas Copco AB or generate 1.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Atlas Copco AB  vs.  Komori

Atlas Copco AB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Copco AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Atlas Copco is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Komori

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Atlas Copco and Komori

The main advantage of trading using opposite Atlas Copco and Komori positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Copco position performs unexpectedly, Komori 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 Komori will offset losses from the drop in Komori's long position.

The idea behind Atlas Copco AB and Komori 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .