Correlation Between Aalberts Industries and Koninklijke BAM
Can any of the company-specific risk be diversified away by investing in both Aalberts Industries and Koninklijke BAM 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 Aalberts Industries and Koninklijke BAM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aalberts Industries NV and Koninklijke BAM Groep, you can compare the effects of market volatilities on Aalberts Industries and Koninklijke BAM 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 Aalberts Industries with a short position of Koninklijke BAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aalberts Industries and Koninklijke BAM.
Diversification Opportunities for Aalberts Industries and Koninklijke BAM
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aalberts and Koninklijke is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Aalberts Industries NV and Koninklijke BAM Groep in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke BAM Groep and Aalberts Industries 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 Aalberts Industries NV are associated (or correlated) with Koninklijke BAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke BAM Groep has no effect on the direction of Aalberts Industries i.e., Aalberts Industries and Koninklijke BAM go up and down completely randomly.
Pair Corralation between Aalberts Industries and Koninklijke BAM
Assuming the 90 days trading horizon Aalberts Industries is expected to generate 48.56 times less return on investment than Koninklijke BAM. But when comparing it to its historical volatility, Aalberts Industries NV is 1.15 times less risky than Koninklijke BAM. It trades about 0.0 of its potential returns per unit of risk. Koninklijke BAM Groep is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 189.00 in Koninklijke BAM Groep on August 29, 2024 and sell it today you would earn a total of 203.00 from holding Koninklijke BAM Groep or generate 107.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aalberts Industries NV vs. Koninklijke BAM Groep
Performance |
| Timeline |
| Aalberts Industries |
| Koninklijke BAM Groep |
Aalberts Industries and Koninklijke BAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aalberts Industries and Koninklijke BAM
The main advantage of trading using opposite Aalberts Industries and Koninklijke BAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aalberts Industries position performs unexpectedly, Koninklijke BAM 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 Koninklijke BAM will offset losses from the drop in Koninklijke BAM's long position.| Aalberts Industries vs. TKH Group NV | Aalberts Industries vs. Koninklijke Vopak NV | Aalberts Industries vs. Randstad NV | Aalberts Industries vs. SBM Offshore NV |
| Koninklijke BAM vs. Fugro NV | Koninklijke BAM vs. SBM Offshore NV | Koninklijke BAM vs. Aegon NV | Koninklijke BAM vs. PostNL NV |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |