Correlation Between Armm and Cellink AB

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

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

Diversification Opportunities for Armm and Cellink AB

0.0

Correlation Coefficient

Armm  Cellink AB

Pay attention - limited upside

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

Pair Corralation between Armm and Cellink AB

Given the investment horizon of 90 days Armm Inc is expected to generate 14.3 times more return on investment than Cellink AB. However, Armm is 14.3 times more volatile than Cellink AB. It trades about 0.06 of its potential returns per unit of risk. Cellink AB is currently generating about 0.0 per unit of risk. If you would invest  0.03  in Armm Inc on August 17, 2024 and sell it today you would earn a total of  0.06  from holding Armm Inc or generate 200.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Armm Inc  vs.  Cellink AB

Armm Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armm Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Armm is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Cellink AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cellink AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Armm and Cellink AB

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

The idea behind Armm Inc and Cellink 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.