Correlation Between Materialise and Atrium Ljungberg

Can any of the company-specific risk be diversified away by investing in both Materialise 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 Materialise and Atrium Ljungberg into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Materialise NV and Atrium Ljungberg AB, you can compare the effects of market volatilities on Materialise 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 Materialise with a short position of Atrium Ljungberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and Atrium Ljungberg.

Diversification Opportunities for Materialise and Atrium Ljungberg

-0.88

Correlation Coefficient

Materialise  Atrium Ljungberg

Pay attention - limited upside

The 3 months correlation between Materialise and Atrium is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Atrium Ljungberg AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Ljungberg and Materialise 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 Materialise NV 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 Materialise i.e., Materialise and Atrium Ljungberg go up and down completely randomly.

Pair Corralation between Materialise and Atrium Ljungberg

Assuming the 90 days trading horizon Materialise is expected to generate 11.64 times less return on investment than Atrium Ljungberg. In addition to that, Materialise is 1.32 times more volatile than Atrium Ljungberg AB. It trades about 0.0 of its total potential returns per unit of risk. Atrium Ljungberg AB is currently generating about 0.06 per unit of volatility. If you would invest  970.00  in Atrium Ljungberg AB on October 21, 2024 and sell it today you would earn a total of  690.00  from holding Atrium Ljungberg AB or generate 71.13% return on investment over 90 days.

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

Materialise NV  vs.  Atrium Ljungberg AB

Materialise NV

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Materialise NV are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Materialise unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Materialise and Atrium Ljungberg

The main advantage of trading using opposite Materialise and Atrium Ljungberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise 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.

The idea behind Materialise NV and Atrium Ljungberg AB 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.