Correlation Between Ams AG and Flow Traders
Can any of the company-specific risk be diversified away by investing in both Ams AG and Flow Traders 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 Ams AG and Flow Traders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ams AG and Flow Traders NV, you can compare the effects of market volatilities on Ams AG and Flow Traders 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 Ams AG with a short position of Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ams AG and Flow Traders.
Diversification Opportunities for Ams AG and Flow Traders
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ams and Flow is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ams AG and Flow Traders NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Traders NV and Ams AG 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 Ams AG are associated (or correlated) with Flow Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Traders NV has no effect on the direction of Ams AG i.e., Ams AG and Flow Traders go up and down completely randomly.
Pair Corralation between Ams AG and Flow Traders
Assuming the 90 days trading horizon Ams AG is expected to generate 28.25 times more return on investment than Flow Traders. However, Ams AG is 28.25 times more volatile than Flow Traders NV. It trades about 0.04 of its potential returns per unit of risk. Flow Traders NV is currently generating about 0.02 per unit of risk. If you would invest 3,379 in Ams AG on September 12, 2024 and sell it today you would lose (2,788) from holding Ams AG or give up 82.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.59% |
| Values | Daily Returns |
Ams AG vs. Flow Traders NV
Performance |
| Timeline |
| Ams AG |
| Flow Traders NV |
Ams AG and Flow Traders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ams AG and Flow Traders
The main advantage of trading using opposite Ams AG and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ams AG position performs unexpectedly, Flow Traders 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 Flow Traders will offset losses from the drop in Flow Traders' long position.| Ams AG vs. Flow Traders NV | Ams AG vs. Batm Advanced Communications | Ams AG vs. Charter Communications Cl | Ams AG vs. Broadcom |
| Flow Traders vs. Hong Kong Land | Flow Traders vs. Neometals | Flow Traders vs. Coor Service Management | Flow Traders vs. Fidelity Sustainable USD |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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