Correlation Between Ackermans Van and Lotus Bakeries
Can any of the company-specific risk be diversified away by investing in both Ackermans Van and Lotus Bakeries 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 Ackermans Van and Lotus Bakeries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ackermans Van Haaren and Lotus Bakeries, you can compare the effects of market volatilities on Ackermans Van and Lotus Bakeries 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 Ackermans Van with a short position of Lotus Bakeries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ackermans Van and Lotus Bakeries.
Diversification Opportunities for Ackermans Van and Lotus Bakeries
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ackermans and Lotus is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ackermans Van Haaren and Lotus Bakeries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Bakeries and Ackermans Van 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 Ackermans Van Haaren are associated (or correlated) with Lotus Bakeries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Bakeries has no effect on the direction of Ackermans Van i.e., Ackermans Van and Lotus Bakeries go up and down completely randomly.
Pair Corralation between Ackermans Van and Lotus Bakeries
Assuming the 90 days trading horizon Ackermans Van Haaren is expected to generate 0.82 times more return on investment than Lotus Bakeries. However, Ackermans Van Haaren is 1.21 times less risky than Lotus Bakeries. It trades about 0.07 of its potential returns per unit of risk. Lotus Bakeries is currently generating about 0.05 per unit of risk. If you would invest 16,240 in Ackermans Van Haaren on November 3, 2024 and sell it today you would earn a total of 2,520 from holding Ackermans Van Haaren or generate 15.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ackermans Van Haaren vs. Lotus Bakeries
Performance |
| Timeline |
| Ackermans Van Haaren |
| Lotus Bakeries |
Ackermans Van and Lotus Bakeries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ackermans Van and Lotus Bakeries
The main advantage of trading using opposite Ackermans Van and Lotus Bakeries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ackermans Van position performs unexpectedly, Lotus Bakeries 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 Lotus Bakeries will offset losses from the drop in Lotus Bakeries' long position.| Ackermans Van vs. Sofina Socit Anonyme | Ackermans Van vs. Groep Brussel Lambert | Ackermans Van vs. Brederode SA | Ackermans Van vs. Solvay SA |
| Lotus Bakeries vs. Sofina Socit Anonyme | Lotus Bakeries vs. Ackermans Van Haaren | Lotus Bakeries vs. Melexis NV | Lotus Bakeries vs. DIeteren Group SA |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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