Correlation Between Dalata Hotel and Atrium Ljungberg

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

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

Diversification Opportunities for Dalata Hotel and Atrium Ljungberg

-0.44

Correlation Coefficient

Dalata Hotel  Atrium Ljungberg

Very good diversification

The 3 months correlation between Dalata and Atrium is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and Atrium Ljungberg AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Ljungberg and Dalata Hotel 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 Dalata Hotel Group 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 Dalata Hotel i.e., Dalata Hotel and Atrium Ljungberg go up and down completely randomly.

Pair Corralation between Dalata Hotel and Atrium Ljungberg

Assuming the 90 days horizon Dalata Hotel Group is expected to generate 1.06 times more return on investment than Atrium Ljungberg. However, Dalata Hotel is 1.06 times more volatile than Atrium Ljungberg AB. It trades about 0.13 of its potential returns per unit of risk. Atrium Ljungberg AB is currently generating about -0.06 per unit of risk. If you would invest  426.00  in Dalata Hotel Group on October 23, 2024 and sell it today you would earn a total of  55.00  from holding Dalata Hotel Group or generate 12.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Dalata Hotel Group  vs.  Atrium Ljungberg AB

Dalata Hotel Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dalata Hotel Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Dalata Hotel reported 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 unsteady 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 Dalata Hotel and Atrium Ljungberg

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

Check out your portfolio center.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.