Correlation Between Flow Traders and Made Tech
Can any of the company-specific risk be diversified away by investing in both Flow Traders and Made Tech 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 Made Tech 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 Made Tech Group, you can compare the effects of market volatilities on Flow Traders and Made Tech 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 Made Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and Made Tech.
Diversification Opportunities for Flow Traders and Made Tech
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flow and Made is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders NV and Made Tech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Made Tech Group 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 Made Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Made Tech Group has no effect on the direction of Flow Traders i.e., Flow Traders and Made Tech go up and down completely randomly.
Pair Corralation between Flow Traders and Made Tech
Assuming the 90 days trading horizon Flow Traders is expected to generate 1.07 times less return on investment than Made Tech. But when comparing it to its historical volatility, Flow Traders NV is 1.5 times less risky than Made Tech. It trades about 0.31 of its potential returns per unit of risk. Made Tech Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,475 in Made Tech Group on November 7, 2024 and sell it today you would earn a total of 300.00 from holding Made Tech Group or generate 12.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flow Traders NV vs. Made Tech Group
Performance |
| Timeline |
| Flow Traders NV |
| Made Tech Group |
Flow Traders and Made Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Traders and Made Tech
The main advantage of trading using opposite Flow Traders and Made Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders position performs unexpectedly, Made Tech 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 Made Tech will offset losses from the drop in Made Tech's long position.| Flow Traders vs. Gaming Realms plc | Flow Traders vs. Worldwide Healthcare Trust | Flow Traders vs. Gaztransport et Technigaz | Flow Traders vs. Advanced Medical Solutions |
| Made Tech vs. CNH Industrial NV | Made Tech vs. Iron Mountain | Made Tech vs. GreenX Metals | Made Tech vs. McEwen Mining |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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