Correlation Between Atrium Ljungberg and Avanza Bank

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

Diversification Opportunities for Atrium Ljungberg and Avanza Bank

0.0

Correlation Coefficient

Atrium Ljungberg  Avanza Bank

Pay attention - limited upside

The 3 months correlation between Atrium and Avanza is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Atrium Ljungberg AB and Avanza Bank Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avanza Bank Holding 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 Avanza Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avanza Bank Holding has no effect on the direction of Atrium Ljungberg i.e., Atrium Ljungberg and Avanza Bank go up and down completely randomly.

Pair Corralation between Atrium Ljungberg and Avanza Bank

If you would invest  27,290  in Avanza Bank Holding on December 29, 2024 and sell it today you would earn a total of  3,660  from holding Avanza Bank Holding or generate 13.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Atrium Ljungberg AB  vs.  Avanza Bank Holding

Atrium Ljungberg

Risk-Adjusted Performance

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 somewhat strong essential indicators, Atrium Ljungberg is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Avanza Bank Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Avanza Bank Holding are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Avanza Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atrium Ljungberg and Avanza Bank

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

The idea behind Atrium Ljungberg AB and Avanza Bank Holding 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.