Correlation Between Chocoladefabriken and National Atomic

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

By analyzing existing cross correlation between Chocoladefabriken Lindt Spruengli and National Atomic Co, you can compare the effects of market volatilities on Chocoladefabriken and National Atomic 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 Chocoladefabriken with a short position of National Atomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and National Atomic.

Diversification Opportunities for Chocoladefabriken and National Atomic

-0.04

Correlation Coefficient

Chocoladefabriken  National Atomic

Good diversification

The 3 months correlation between Chocoladefabriken and National is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen and National Atomic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Atomic and Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli are associated (or correlated) with National Atomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Atomic has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and National Atomic go up and down completely randomly.

Pair Corralation between Chocoladefabriken and National Atomic

Assuming the 90 days trading horizon Chocoladefabriken Lindt Spruengli is expected to under-perform the National Atomic. But the stock apears to be less risky and, when comparing its historical volatility, Chocoladefabriken Lindt Spruengli is 1.91 times less risky than National Atomic. The stock trades about -0.12 of its potential returns per unit of risk. The National Atomic Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,650  in National Atomic Co on October 8, 2024 and sell it today you would earn a total of  145.00  from holding National Atomic Co or generate 3.97% return on investment over 90 days.

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

Chocoladefabriken Lindt Spruen  vs.  National Atomic Co

Chocoladefabriken Lindt

Risk-Adjusted Performance

0 of 100

Very Weak

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

National Atomic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in National Atomic Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, National Atomic is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Chocoladefabriken and National Atomic

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

The idea behind Chocoladefabriken Lindt Spruengli and National Atomic Co 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.