Correlation Between Atrium Ljungberg and John Mattson

Can any of the company-specific risk be diversified away by investing in both Atrium Ljungberg and John Mattson 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 John Mattson 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 John Mattson Fastighetsforetagen, you can compare the effects of market volatilities on Atrium Ljungberg and John Mattson 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 John Mattson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atrium Ljungberg and John Mattson.

Diversification Opportunities for Atrium Ljungberg and John Mattson

0.48

Correlation Coefficient

Atrium Ljungberg  John Mattson

Very weak diversification

The 3 months correlation between Atrium and John is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Atrium Ljungberg AB and John Mattson Fastighetsforetag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Mattson Fastigh 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 John Mattson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Mattson Fastigh has no effect on the direction of Atrium Ljungberg i.e., Atrium Ljungberg and John Mattson go up and down completely randomly.

Pair Corralation between Atrium Ljungberg and John Mattson

Assuming the 90 days trading horizon Atrium Ljungberg AB is expected to under-perform the John Mattson. In addition to that, Atrium Ljungberg is 1.21 times more volatile than John Mattson Fastighetsforetagen. It trades about -0.11 of its total potential returns per unit of risk. John Mattson Fastighetsforetagen is currently generating about 0.0 per unit of volatility. If you would invest  6,200  in John Mattson Fastighetsforetagen on September 4, 2024 and sell it today you would lose (20.00) from holding John Mattson Fastighetsforetagen or give up 0.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Atrium Ljungberg AB  vs.  John Mattson Fastighetsforetag

Atrium Ljungberg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atrium Ljungberg AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

John Mattson Fastigh

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Mattson Fastighetsforetagen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, John Mattson is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Atrium Ljungberg and John Mattson

The main advantage of trading using opposite Atrium Ljungberg and John Mattson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atrium Ljungberg position performs unexpectedly, John Mattson 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 John Mattson will offset losses from the drop in John Mattson's long position.

The idea behind Atrium Ljungberg AB and John Mattson Fastighetsforetagen pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.