Correlation Between ABN Amro and Bpost NV
Can any of the company-specific risk be diversified away by investing in both ABN Amro and Bpost NV 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 ABN Amro and Bpost NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABN Amro Group and Bpost NV, you can compare the effects of market volatilities on ABN Amro and Bpost NV 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 ABN Amro with a short position of Bpost NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABN Amro and Bpost NV.
Diversification Opportunities for ABN Amro and Bpost NV
Poor diversification
The 3 months correlation between ABN and Bpost is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ABN Amro Group and Bpost NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bpost NV and ABN Amro 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 ABN Amro Group are associated (or correlated) with Bpost NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bpost NV has no effect on the direction of ABN Amro i.e., ABN Amro and Bpost NV go up and down completely randomly.
Pair Corralation between ABN Amro and Bpost NV
Assuming the 90 days trading horizon ABN Amro Group is expected to generate 0.75 times more return on investment than Bpost NV. However, ABN Amro Group is 1.33 times less risky than Bpost NV. It trades about 0.06 of its potential returns per unit of risk. Bpost NV is currently generating about -0.07 per unit of risk. If you would invest 990.00 in ABN Amro Group on August 28, 2024 and sell it today you would earn a total of 499.00 from holding ABN Amro Group or generate 50.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABN Amro Group vs. Bpost NV
Performance |
| Timeline |
| ABN Amro Group |
| Bpost NV |
ABN Amro and Bpost NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABN Amro and Bpost NV
The main advantage of trading using opposite ABN Amro and Bpost NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABN Amro position performs unexpectedly, Bpost NV 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 Bpost NV will offset losses from the drop in Bpost NV's long position.| ABN Amro vs. ING Groep NV | ABN Amro vs. Aegon NV | ABN Amro vs. NN Group NV | ABN Amro vs. Koninklijke Ahold Delhaize |
| Bpost NV vs. Proximus NV | Bpost NV vs. ageas SANV | Bpost NV vs. Etablissementen Franz Colruyt | Bpost NV vs. KBC Groep 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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