Correlation Between Greenland Acquisition and Atlas Copco

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

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

Diversification Opportunities for Greenland Acquisition and Atlas Copco

0.45

Correlation Coefficient

Greenland Acquisition  Atlas Copco

Very weak diversification

The 3 months correlation between Greenland and Atlas is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Greenland Acquisition Corp 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 Greenland Acquisition 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 Greenland Acquisition Corp 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 Greenland Acquisition i.e., Greenland Acquisition and Atlas Copco go up and down completely randomly.

Pair Corralation between Greenland Acquisition and Atlas Copco

Given the investment horizon of 90 days Greenland Acquisition Corp is expected to generate 3.08 times more return on investment than Atlas Copco. However, Greenland Acquisition is 3.08 times more volatile than Atlas Copco AB. It trades about 0.07 of its potential returns per unit of risk. Atlas Copco AB is currently generating about -0.01 per unit of risk. If you would invest  140.00  in Greenland Acquisition Corp on September 26, 2024 and sell it today you would earn a total of  54.00  from holding Greenland Acquisition Corp or generate 38.57% return on investment over 90 days.

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

Greenland Acquisition Corp  vs.  Atlas Copco AB

Greenland Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenland Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Atlas Copco AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlas Copco AB 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.

Pair Trading with Greenland Acquisition and Atlas Copco

The main advantage of trading using opposite Greenland Acquisition and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenland Acquisition 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 Greenland Acquisition Corp and Atlas Copco AB 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.