Correlation Between ABN Amro and NV Nederlandsche
Can any of the company-specific risk be diversified away by investing in both ABN Amro and NV Nederlandsche 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 NV Nederlandsche 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 NV Nederlandsche Apparatenfabriek, you can compare the effects of market volatilities on ABN Amro and NV Nederlandsche 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 NV Nederlandsche. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABN Amro and NV Nederlandsche.
Diversification Opportunities for ABN Amro and NV Nederlandsche
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABN and NEDAP is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ABN Amro Group and NV Nederlandsche Apparatenfabr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Nederlandsche App 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 NV Nederlandsche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Nederlandsche App has no effect on the direction of ABN Amro i.e., ABN Amro and NV Nederlandsche go up and down completely randomly.
Pair Corralation between ABN Amro and NV Nederlandsche
Assuming the 90 days trading horizon ABN Amro Group is expected to generate 1.56 times more return on investment than NV Nederlandsche. However, ABN Amro is 1.56 times more volatile than NV Nederlandsche Apparatenfabriek. It trades about 0.03 of its potential returns per unit of risk. NV Nederlandsche Apparatenfabriek is currently generating about 0.01 per unit of risk. If you would invest 1,220 in ABN Amro Group on August 26, 2024 and sell it today you would earn a total of 254.00 from holding ABN Amro Group or generate 20.82% 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. NV Nederlandsche Apparatenfabr
Performance |
| Timeline |
| ABN Amro Group |
| NV Nederlandsche App |
ABN Amro and NV Nederlandsche Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABN Amro and NV Nederlandsche
The main advantage of trading using opposite ABN Amro and NV Nederlandsche positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABN Amro position performs unexpectedly, NV Nederlandsche 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 NV Nederlandsche will offset losses from the drop in NV Nederlandsche'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 |
| NV Nederlandsche vs. TKH Group NV | NV Nederlandsche vs. Aalberts Industries NV | NV Nederlandsche vs. Amsterdam Commodities NV | NV Nederlandsche vs. iShares SP 500 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Commodity Directory Find actively traded commodities issued by global exchanges |