Correlation Between Zealand Pharma and ATT
Can any of the company-specific risk be diversified away by investing in both Zealand Pharma and ATT 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 Zealand Pharma and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zealand Pharma AS and ATT Inc, you can compare the effects of market volatilities on Zealand Pharma and ATT 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 Zealand Pharma with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zealand Pharma and ATT.
Diversification Opportunities for Zealand Pharma and ATT
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zealand and ATT is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Zealand Pharma AS and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Zealand Pharma 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 Zealand Pharma AS are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Zealand Pharma i.e., Zealand Pharma and ATT go up and down completely randomly.
Pair Corralation between Zealand Pharma and ATT
Assuming the 90 days trading horizon Zealand Pharma AS is expected to under-perform the ATT. In addition to that, Zealand Pharma is 2.22 times more volatile than ATT Inc. It trades about -0.24 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.0 per unit of volatility. If you would invest 1,684 in ATT Inc on January 25, 2024 and sell it today you would lose (3.00) from holding ATT Inc or give up 0.18% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 90.91% |
Values | Daily Returns |
Zealand Pharma AS vs. ATT Inc
Performance |
Timeline |
Zealand Pharma AS |
ATT Inc |
Zealand Pharma and ATT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zealand Pharma and ATT
The main advantage of trading using opposite Zealand Pharma and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zealand Pharma position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.Zealand Pharma vs. Ambu AS | Zealand Pharma vs. DSV Panalpina AS | Zealand Pharma vs. Bavarian Nordic | Zealand Pharma vs. GN Store Nord |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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