Correlation Between Digilife Technologies and Atrium Ljungberg
Can any of the company-specific risk be diversified away by investing in both Digilife Technologies 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 Digilife Technologies and Atrium Ljungberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digilife Technologies Limited and Atrium Ljungberg AB, you can compare the effects of market volatilities on Digilife Technologies 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 Digilife Technologies with a short position of Atrium Ljungberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digilife Technologies and Atrium Ljungberg.
Diversification Opportunities for Digilife Technologies and Atrium Ljungberg
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Digilife and Atrium is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited and Atrium Ljungberg AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Ljungberg and Digilife Technologies 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 Digilife Technologies Limited 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 Digilife Technologies i.e., Digilife Technologies and Atrium Ljungberg go up and down completely randomly.
Pair Corralation between Digilife Technologies and Atrium Ljungberg
Assuming the 90 days trading horizon Digilife Technologies Limited is expected to under-perform the Atrium Ljungberg. In addition to that, Digilife Technologies is 2.3 times more volatile than Atrium Ljungberg AB. It trades about -0.07 of its total potential returns per unit of risk. Atrium Ljungberg AB is currently generating about -0.04 per unit of volatility. If you would invest 1,728 in Atrium Ljungberg AB on November 6, 2024 and sell it today you would lose (38.00) from holding Atrium Ljungberg AB or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Digilife Technologies Limited vs. Atrium Ljungberg AB
Performance |
| Timeline |
| Digilife Technologies |
| Atrium Ljungberg |
Digilife Technologies and Atrium Ljungberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digilife Technologies and Atrium Ljungberg
The main advantage of trading using opposite Digilife Technologies and Atrium Ljungberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digilife Technologies 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.| Digilife Technologies vs. The Yokohama Rubber | Digilife Technologies vs. Summit Materials | Digilife Technologies vs. GAMING FAC SA | Digilife Technologies vs. Heidelberg Materials AG |
| Atrium Ljungberg vs. China Resources Land | Atrium Ljungberg vs. SEAZEN GROUP LTD | Atrium Ljungberg vs. GANGLONG CHINA PRGRLTD |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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