Correlation Between Atlas Copco and KUKA Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both Atlas Copco and KUKA Aktiengesellscha 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 KUKA Aktiengesellscha 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 KUKA Aktiengesellschaft, you can compare the effects of market volatilities on Atlas Copco and KUKA Aktiengesellscha 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 KUKA Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and KUKA Aktiengesellscha.

Diversification Opportunities for Atlas Copco and KUKA Aktiengesellscha

0.0

Correlation Coefficient

Atlas Copco  KUKA Aktiengesellscha

Pay attention - limited upside

The 3 months correlation between Atlas and KUKA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco AB and KUKA Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KUKA Aktiengesellschaft 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 KUKA Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KUKA Aktiengesellschaft has no effect on the direction of Atlas Copco i.e., Atlas Copco and KUKA Aktiengesellscha go up and down completely randomly.

Pair Corralation between Atlas Copco and KUKA Aktiengesellscha

If you would invest  1,530  in Atlas Copco AB on December 28, 2024 and sell it today you would earn a total of  134.00  from holding Atlas Copco AB or generate 8.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Atlas Copco AB  vs.  KUKA Aktiengesellschaft

Atlas Copco AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Copco AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward-looking signals, Atlas Copco may actually be approaching a critical reversion point that can send shares even higher in April 2025.

KUKA Aktiengesellschaft

Risk-Adjusted Performance

Very Weak

Over the last 90 days KUKA Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, KUKA Aktiengesellscha 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 KUKA Aktiengesellscha

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

The idea behind Atlas Copco AB and KUKA Aktiengesellschaft 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.