Correlation Between BW OFFSHORE and Atrium Ljungberg
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE 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 BW OFFSHORE and Atrium Ljungberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW OFFSHORE LTD and Atrium Ljungberg AB, you can compare the effects of market volatilities on BW OFFSHORE 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 BW OFFSHORE with a short position of Atrium Ljungberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and Atrium Ljungberg.
Diversification Opportunities for BW OFFSHORE and Atrium Ljungberg
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between XY81 and Atrium is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and Atrium Ljungberg AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Ljungberg and BW OFFSHORE 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 BW OFFSHORE LTD 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 BW OFFSHORE i.e., BW OFFSHORE and Atrium Ljungberg go up and down completely randomly.
Pair Corralation between BW OFFSHORE and Atrium Ljungberg
Assuming the 90 days trading horizon BW OFFSHORE is expected to generate 1.66 times less return on investment than Atrium Ljungberg. But when comparing it to its historical volatility, BW OFFSHORE LTD is 1.0 times less risky than Atrium Ljungberg. It trades about 0.04 of its potential returns per unit of risk. Atrium Ljungberg AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 956.00 in Atrium Ljungberg AB on October 28, 2024 and sell it today you would earn a total of 772.00 from holding Atrium Ljungberg AB or generate 80.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. Atrium Ljungberg AB
Performance |
| Timeline |
| BW OFFSHORE LTD |
| Atrium Ljungberg |
BW OFFSHORE and Atrium Ljungberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and Atrium Ljungberg
The main advantage of trading using opposite BW OFFSHORE and Atrium Ljungberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE 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.| BW OFFSHORE vs. Nishi Nippon Railroad Co | BW OFFSHORE vs. MACOM Technology Solutions | BW OFFSHORE vs. Gaztransport Technigaz SA | BW OFFSHORE vs. Firan Technology Group |
| Atrium Ljungberg vs. Suntory Beverage Food | Atrium Ljungberg vs. PKSHA TECHNOLOGY INC | Atrium Ljungberg vs. Digilife Technologies Limited | Atrium Ljungberg vs. Addtech AB |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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