Correlation Between Atrium Ljungberg and Bravida Holding

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

Diversification Opportunities for Atrium Ljungberg and Bravida Holding

-0.66

Correlation Coefficient

Atrium Ljungberg  Bravida Holding

Excellent diversification

The 3 months correlation between Atrium and Bravida is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Atrium Ljungberg AB and Bravida Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bravida Holding AB 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 Bravida Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bravida Holding AB has no effect on the direction of Atrium Ljungberg i.e., Atrium Ljungberg and Bravida Holding go up and down completely randomly.

Pair Corralation between Atrium Ljungberg and Bravida Holding

Assuming the 90 days trading horizon Atrium Ljungberg AB is expected to under-perform the Bravida Holding. In addition to that, Atrium Ljungberg is 1.48 times more volatile than Bravida Holding AB. It trades about -0.14 of its total potential returns per unit of risk. Bravida Holding AB is currently generating about 0.19 per unit of volatility. If you would invest  8,010  in Bravida Holding AB on December 29, 2024 and sell it today you would earn a total of  1,190  from holding Bravida Holding AB or generate 14.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Atrium Ljungberg AB  vs.  Bravida Holding AB

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 weak performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Bravida Holding AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bravida Holding AB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Bravida Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atrium Ljungberg and Bravida Holding

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

The idea behind Atrium Ljungberg AB and Bravida Holding 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.