Correlation Between Atrium Ljungberg and GANGLONG CHINA
Can any of the company-specific risk be diversified away by investing in both Atrium Ljungberg and GANGLONG CHINA 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 Atrium Ljungberg and GANGLONG CHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atrium Ljungberg AB and GANGLONG CHINA PRGRLTD, you can compare the effects of market volatilities on Atrium Ljungberg and GANGLONG CHINA 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 Atrium Ljungberg with a short position of GANGLONG CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atrium Ljungberg and GANGLONG CHINA.
Diversification Opportunities for Atrium Ljungberg and GANGLONG CHINA
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atrium and GANGLONG is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Atrium Ljungberg AB and GANGLONG CHINA PRGRLTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GANGLONG CHINA PRGRLTD and Atrium Ljungberg 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 Atrium Ljungberg AB are associated (or correlated) with GANGLONG CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GANGLONG CHINA PRGRLTD has no effect on the direction of Atrium Ljungberg i.e., Atrium Ljungberg and GANGLONG CHINA go up and down completely randomly.
Pair Corralation between Atrium Ljungberg and GANGLONG CHINA
Assuming the 90 days horizon Atrium Ljungberg AB is expected to generate 0.29 times more return on investment than GANGLONG CHINA. However, Atrium Ljungberg AB is 3.43 times less risky than GANGLONG CHINA. It trades about -0.11 of its potential returns per unit of risk. GANGLONG CHINA PRGRLTD is currently generating about -0.14 per unit of risk. If you would invest 1,726 in Atrium Ljungberg AB on September 26, 2024 and sell it today you would lose (68.00) from holding Atrium Ljungberg AB or give up 3.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atrium Ljungberg AB vs. GANGLONG CHINA PRGRLTD
Performance |
| Timeline |
| Atrium Ljungberg |
| GANGLONG CHINA PRGRLTD |
Atrium Ljungberg and GANGLONG CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atrium Ljungberg and GANGLONG CHINA
The main advantage of trading using opposite Atrium Ljungberg and GANGLONG CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atrium Ljungberg position performs unexpectedly, GANGLONG CHINA 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 GANGLONG CHINA will offset losses from the drop in GANGLONG CHINA's long position.| Atrium Ljungberg vs. China Resources Land | Atrium Ljungberg vs. DEUTSCHE WOHNEN ADRS12 | Atrium Ljungberg vs. CTP NV EO | Atrium Ljungberg vs. SEAZEN GROUP LTD |
| GANGLONG CHINA vs. China Resources Land | GANGLONG CHINA vs. DEUTSCHE WOHNEN ADRS12 | GANGLONG CHINA vs. CTP NV EO | GANGLONG CHINA vs. SEAZEN GROUP LTD |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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