Correlation Between GANGLONG CHINA and Atrium Ljungberg
Can any of the company-specific risk be diversified away by investing in both GANGLONG CHINA 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 GANGLONG CHINA and Atrium Ljungberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GANGLONG CHINA PRGRLTD and Atrium Ljungberg AB, you can compare the effects of market volatilities on GANGLONG CHINA 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 GANGLONG CHINA with a short position of Atrium Ljungberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of GANGLONG CHINA and Atrium Ljungberg.
Diversification Opportunities for GANGLONG CHINA and Atrium Ljungberg
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GANGLONG and Atrium is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding GANGLONG CHINA PRGRLTD and Atrium Ljungberg AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Ljungberg and GANGLONG CHINA 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 GANGLONG CHINA PRGRLTD 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 GANGLONG CHINA i.e., GANGLONG CHINA and Atrium Ljungberg go up and down completely randomly.
Pair Corralation between GANGLONG CHINA and Atrium Ljungberg
Assuming the 90 days horizon GANGLONG CHINA PRGRLTD is expected to generate 17.5 times more return on investment than Atrium Ljungberg. However, GANGLONG CHINA is 17.5 times more volatile than Atrium Ljungberg AB. It trades about 0.06 of its potential returns per unit of risk. Atrium Ljungberg AB is currently generating about -0.21 per unit of risk. If you would invest 1.85 in GANGLONG CHINA PRGRLTD on October 14, 2024 and sell it today you would lose (1.05) from holding GANGLONG CHINA PRGRLTD or give up 56.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GANGLONG CHINA PRGRLTD vs. Atrium Ljungberg AB
Performance |
| Timeline |
| GANGLONG CHINA PRGRLTD |
| Atrium Ljungberg |
GANGLONG CHINA and Atrium Ljungberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GANGLONG CHINA and Atrium Ljungberg
The main advantage of trading using opposite GANGLONG CHINA and Atrium Ljungberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GANGLONG CHINA 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.| GANGLONG CHINA vs. MeVis Medical Solutions | GANGLONG CHINA vs. FIREWEED METALS P | GANGLONG CHINA vs. CREO MEDICAL GRP | GANGLONG CHINA vs. Merit Medical Systems |
| Atrium Ljungberg vs. Eidesvik Offshore ASA | Atrium Ljungberg vs. BW OFFSHORE LTD | Atrium Ljungberg vs. PT Wintermar Offshore | Atrium Ljungberg vs. Nexstar Media Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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