Correlation Between Pergamon Status and Alarko Holding

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

By analyzing existing cross correlation between Pergamon Status Dis and Alarko Holding AS, you can compare the effects of market volatilities on Pergamon Status and Alarko 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 Pergamon Status with a short position of Alarko Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pergamon Status and Alarko Holding.

Diversification Opportunities for Pergamon Status and Alarko Holding

0.59

Correlation Coefficient

Pergamon Status  Alarko Holding

Very weak diversification

The 3 months correlation between Pergamon and Alarko is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pergamon Status Dis and Alarko Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alarko Holding AS and Pergamon Status 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 Pergamon Status Dis are associated (or correlated) with Alarko Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alarko Holding AS has no effect on the direction of Pergamon Status i.e., Pergamon Status and Alarko Holding go up and down completely randomly.

Pair Corralation between Pergamon Status and Alarko Holding

Assuming the 90 days trading horizon Pergamon Status Dis is expected to under-perform the Alarko Holding. In addition to that, Pergamon Status is 1.06 times more volatile than Alarko Holding AS. It trades about -0.09 of its total potential returns per unit of risk. Alarko Holding AS is currently generating about -0.07 per unit of volatility. If you would invest  9,095  in Alarko Holding AS on December 23, 2024 and sell it today you would lose (1,055) from holding Alarko Holding AS or give up 11.6% of portfolio value over 90 days.

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

Pergamon Status Dis  vs.  Alarko Holding AS

Pergamon Status Dis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pergamon Status Dis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Alarko Holding AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alarko Holding AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Pergamon Status and Alarko Holding

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

The idea behind Pergamon Status Dis and Alarko Holding AS 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.