Correlation Between Nomura Holdings and Atrium Ljungberg
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings 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 Nomura Holdings and Atrium Ljungberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomura Holdings and Atrium Ljungberg AB, you can compare the effects of market volatilities on Nomura Holdings 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 Nomura Holdings with a short position of Atrium Ljungberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Atrium Ljungberg.
Diversification Opportunities for Nomura Holdings and Atrium Ljungberg
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nomura and Atrium is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings and Atrium Ljungberg AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Ljungberg and Nomura Holdings 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 Nomura Holdings 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 Nomura Holdings i.e., Nomura Holdings and Atrium Ljungberg go up and down completely randomly.
Pair Corralation between Nomura Holdings and Atrium Ljungberg
Assuming the 90 days horizon Nomura Holdings is expected to generate 1.52 times less return on investment than Atrium Ljungberg. But when comparing it to its historical volatility, Nomura Holdings is 1.23 times less risky than Atrium Ljungberg. It trades about 0.05 of its potential returns per unit of risk. Atrium Ljungberg AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 856.00 in Atrium Ljungberg AB on September 23, 2024 and sell it today you would earn a total of 848.00 from holding Atrium Ljungberg AB or generate 99.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nomura Holdings vs. Atrium Ljungberg AB
Performance |
Timeline |
Nomura Holdings |
Atrium Ljungberg |
Nomura Holdings and Atrium Ljungberg Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nomura Holdings and Atrium Ljungberg
The main advantage of trading using opposite Nomura Holdings and Atrium Ljungberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings 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.Nomura Holdings vs. Morgan Stanley | Nomura Holdings vs. Morgan Stanley | Nomura Holdings vs. The Charles Schwab | Nomura Holdings vs. The Goldman Sachs |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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