Correlation Between Flow Traders and 70GD
Can any of the company-specific risk be diversified away by investing in both Flow Traders and 70GD 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 Flow Traders and 70GD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Traders NV and 70GD, you can compare the effects of market volatilities on Flow Traders and 70GD 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 Flow Traders with a short position of 70GD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and 70GD.
Diversification Opportunities for Flow Traders and 70GD
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flow and 70GD is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders NV and 70GD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 70GD and Flow Traders 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 Flow Traders NV are associated (or correlated) with 70GD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 70GD has no effect on the direction of Flow Traders i.e., Flow Traders and 70GD go up and down completely randomly.
Pair Corralation between Flow Traders and 70GD
If you would invest 2,180 in Flow Traders NV on November 7, 2024 and sell it today you would earn a total of 234.00 from holding Flow Traders NV or generate 10.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Flow Traders NV vs. 70GD
Performance |
| Timeline |
| Flow Traders NV |
| 70GD |
Flow Traders and 70GD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Traders and 70GD
The main advantage of trading using opposite Flow Traders and 70GD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders position performs unexpectedly, 70GD 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 70GD will offset losses from the drop in 70GD's long position.| Flow Traders vs. Premier Foods PLC | Flow Traders vs. First Class Metals | Flow Traders vs. Hilton Food Group | Flow Traders vs. AMG Advanced Metallurgical |
| 70GD vs. Ecclesiastical Insurance Office | 70GD vs. Odfjell Drilling | 70GD vs. Infrastrutture Wireless Italiane | 70GD vs. Cognizant Technology Solutions |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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