Correlation Between CTP NV and Atrium Ljungberg
Can any of the company-specific risk be diversified away by investing in both CTP NV and Atrium Ljungberg 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 CTP NV and Atrium Ljungberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTP NV EO and Atrium Ljungberg AB, you can compare the effects of market volatilities on CTP NV and Atrium Ljungberg 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 CTP NV with a short position of Atrium Ljungberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTP NV and Atrium Ljungberg.
Diversification Opportunities for CTP NV and Atrium Ljungberg
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CTP and Atrium is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding CTP NV EO and Atrium Ljungberg AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Ljungberg and CTP NV 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 CTP NV EO are associated (or correlated) with Atrium Ljungberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atrium Ljungberg has no effect on the direction of CTP NV i.e., CTP NV and Atrium Ljungberg go up and down completely randomly.
Pair Corralation between CTP NV and Atrium Ljungberg
Assuming the 90 days horizon CTP NV EO is expected to under-perform the Atrium Ljungberg. But the stock apears to be less risky and, when comparing its historical volatility, CTP NV EO is 1.54 times less risky than Atrium Ljungberg. The stock trades about -0.11 of its potential returns per unit of risk. The Atrium Ljungberg AB is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,877 in Atrium Ljungberg AB on September 2, 2024 and sell it today you would lose (129.00) from holding Atrium Ljungberg AB or give up 6.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTP NV EO vs. Atrium Ljungberg AB
Performance |
| Timeline |
| CTP NV EO |
| Atrium Ljungberg |
CTP NV and Atrium Ljungberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTP NV and Atrium Ljungberg
The main advantage of trading using opposite CTP NV and Atrium Ljungberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTP NV position performs unexpectedly, Atrium Ljungberg 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 Atrium Ljungberg will offset losses from the drop in Atrium Ljungberg's long position.| CTP NV vs. AEGEAN AIRLINES | CTP NV vs. Warner Music Group | CTP NV vs. TROPHY GAMES DEV | CTP NV vs. GEAR4MUSIC LS 10 |
| Atrium Ljungberg vs. Hollywood Bowl Group | Atrium Ljungberg vs. Chongqing Machinery Electric | Atrium Ljungberg vs. Beijing Media | Atrium Ljungberg vs. PARKEN Sport Entertainment |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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