Correlation Between ALM Equity and Arctic Blue
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By analyzing existing cross correlation between ALM Equity AB and Arctic Blue Beverages, you can compare the effects of market volatilities on ALM Equity and Arctic Blue 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 ALM Equity with a short position of Arctic Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALM Equity and Arctic Blue.
Diversification Opportunities for ALM Equity and Arctic Blue
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ALM and Arctic is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ALM Equity AB and Arctic Blue Beverages in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Blue Beverages and ALM Equity 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 ALM Equity AB are associated (or correlated) with Arctic Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Blue Beverages has no effect on the direction of ALM Equity i.e., ALM Equity and Arctic Blue go up and down completely randomly.
Pair Corralation between ALM Equity and Arctic Blue
Assuming the 90 days trading horizon ALM Equity AB is expected to generate 0.11 times more return on investment than Arctic Blue. However, ALM Equity AB is 8.82 times less risky than Arctic Blue. It trades about -0.22 of its potential returns per unit of risk. Arctic Blue Beverages is currently generating about -0.05 per unit of risk. If you would invest 8,930 in ALM Equity AB on September 18, 2024 and sell it today you would lose (360.00) from holding ALM Equity AB or give up 4.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALM Equity AB vs. Arctic Blue Beverages
Performance |
| Timeline |
| ALM Equity AB |
| Arctic Blue Beverages |
ALM Equity and Arctic Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALM Equity and Arctic Blue
The main advantage of trading using opposite ALM Equity and Arctic Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALM Equity position performs unexpectedly, Arctic Blue 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 Arctic Blue will offset losses from the drop in Arctic Blue's long position.| ALM Equity vs. Arctic Blue Beverages | ALM Equity vs. Raketech Group Holding | ALM Equity vs. AVTECH Sweden AB | ALM Equity vs. USWE Sports AB |
| Arctic Blue vs. AcadeMedia AB | Arctic Blue vs. Nordea Bank Abp | Arctic Blue vs. eEducation Albert AB | Arctic Blue vs. Catena Media plc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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