Correlation Between Nexans SA and Atkore International

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

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

Diversification Opportunities for Nexans SA and Atkore International

-0.31

Correlation Coefficient

Nexans SA  Atkore International

Very good diversification

The 3 months correlation between Nexans and Atkore is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nexans SA and Atkore International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atkore International and Nexans SA 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 Nexans SA are associated (or correlated) with Atkore International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atkore International has no effect on the direction of Nexans SA i.e., Nexans SA and Atkore International go up and down completely randomly.

Pair Corralation between Nexans SA and Atkore International

Assuming the 90 days horizon Nexans SA is expected to under-perform the Atkore International. But the pink sheet apears to be less risky and, when comparing its historical volatility, Nexans SA is 1.38 times less risky than Atkore International. The pink sheet trades about -0.16 of its potential returns per unit of risk. The Atkore International Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  8,506  in Atkore International Group on September 23, 2024 and sell it today you would lose (166.00) from holding Atkore International Group or give up 1.95% of portfolio value over 90 days.

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

Nexans SA  vs.  Atkore International Group

Nexans SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Atkore International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atkore International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Atkore International is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Nexans SA and Atkore International

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

The idea behind Nexans SA and Atkore International Group 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.