Correlation Between Atmus Filtration and Umicore SA

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

By analyzing existing cross correlation between Atmus Filtration Technologies and Umicore SA, you can compare the effects of market volatilities on Atmus Filtration and Umicore SA 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 Atmus Filtration with a short position of Umicore SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmus Filtration and Umicore SA.

Diversification Opportunities for Atmus Filtration and Umicore SA

-0.35

Correlation Coefficient

Atmus Filtration  Umicore SA

Very good diversification

The 3 months correlation between Atmus and Umicore is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Atmus Filtration Technologies and Umicore SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Umicore SA and Atmus Filtration 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 Atmus Filtration Technologies are associated (or correlated) with Umicore SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Umicore SA has no effect on the direction of Atmus Filtration i.e., Atmus Filtration and Umicore SA go up and down completely randomly.

Pair Corralation between Atmus Filtration and Umicore SA

Given the investment horizon of 90 days Atmus Filtration Technologies is expected to generate 0.61 times more return on investment than Umicore SA. However, Atmus Filtration Technologies is 1.63 times less risky than Umicore SA. It trades about 0.02 of its potential returns per unit of risk. Umicore SA is currently generating about -0.12 per unit of risk. If you would invest  3,875  in Atmus Filtration Technologies on October 8, 2024 and sell it today you would earn a total of  42.00  from holding Atmus Filtration Technologies or generate 1.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Atmus Filtration Technologies  vs.  Umicore SA

Atmus Filtration Tec

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atmus Filtration Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, Atmus Filtration is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Umicore SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Umicore SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Atmus Filtration and Umicore SA

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

The idea behind Atmus Filtration Technologies and Umicore SA 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.