Correlation Between Arctic Blue and ALM Equity
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By analyzing existing cross correlation between Arctic Blue Beverages and ALM Equity AB, you can compare the effects of market volatilities on Arctic Blue and ALM Equity 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 Arctic Blue with a short position of ALM Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Blue and ALM Equity.
Diversification Opportunities for Arctic Blue and ALM Equity
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Arctic and ALM is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Blue Beverages and ALM Equity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALM Equity AB and Arctic Blue 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 Arctic Blue Beverages are associated (or correlated) with ALM Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALM Equity AB has no effect on the direction of Arctic Blue i.e., Arctic Blue and ALM Equity go up and down completely randomly.
Pair Corralation between Arctic Blue and ALM Equity
Assuming the 90 days trading horizon Arctic Blue Beverages is expected to under-perform the ALM Equity. In addition to that, Arctic Blue is 8.14 times more volatile than ALM Equity AB. It trades about -0.05 of its total potential returns per unit of risk. ALM Equity AB is currently generating about -0.29 per unit of volatility. If you would invest 8,930 in ALM Equity AB on September 19, 2024 and sell it today you would lose (520.00) from holding ALM Equity AB or give up 5.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arctic Blue Beverages vs. ALM Equity AB
Performance |
| Timeline |
| Arctic Blue Beverages |
| ALM Equity AB |
Arctic Blue and ALM Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arctic Blue and ALM Equity
The main advantage of trading using opposite Arctic Blue and ALM Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Blue position performs unexpectedly, ALM Equity 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 ALM Equity will offset losses from the drop in ALM Equity's long position.| Arctic Blue vs. Viva Wine Group | Arctic Blue vs. High Coast Distillery | Arctic Blue vs. KABE Group AB | Arctic Blue vs. IAR Systems Group |
| ALM Equity vs. Fabege AB | ALM Equity vs. Castellum AB | ALM Equity vs. Wallenstam AB | ALM Equity vs. Fastighets AB Balder |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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