Correlation Between Flow Traders and Anglo Asian
Can any of the company-specific risk be diversified away by investing in both Flow Traders and Anglo Asian 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 Anglo Asian 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 Anglo Asian Mining, you can compare the effects of market volatilities on Flow Traders and Anglo Asian 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 Anglo Asian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and Anglo Asian.
Diversification Opportunities for Flow Traders and Anglo Asian
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Flow and Anglo is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders NV and Anglo Asian Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo Asian Mining 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 Anglo Asian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo Asian Mining has no effect on the direction of Flow Traders i.e., Flow Traders and Anglo Asian go up and down completely randomly.
Pair Corralation between Flow Traders and Anglo Asian
Assuming the 90 days trading horizon Flow Traders NV is expected to generate 0.56 times more return on investment than Anglo Asian. However, Flow Traders NV is 1.78 times less risky than Anglo Asian. It trades about 0.06 of its potential returns per unit of risk. Anglo Asian Mining is currently generating about -0.38 per unit of risk. If you would invest 2,103 in Flow Traders NV on August 28, 2024 and sell it today you would earn a total of 34.00 from holding Flow Traders NV or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flow Traders NV vs. Anglo Asian Mining
Performance |
| Timeline |
| Flow Traders NV |
| Anglo Asian Mining |
Flow Traders and Anglo Asian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Traders and Anglo Asian
The main advantage of trading using opposite Flow Traders and Anglo Asian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders position performs unexpectedly, Anglo Asian 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 Anglo Asian will offset losses from the drop in Anglo Asian's long position.| Flow Traders vs. Edita Food Industries | Flow Traders vs. Skandinaviska Enskilda Banken | Flow Traders vs. Prudential Financial | Flow Traders vs. Erste Group Bank |
| Anglo Asian vs. Advanced Medical Solutions | Anglo Asian vs. XLMedia PLC | Anglo Asian vs. Flow Traders NV | Anglo Asian vs. Medical Properties Trust |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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