Correlation Between Amsterdam Commodities and Holland Colours
Can any of the company-specific risk be diversified away by investing in both Amsterdam Commodities and Holland Colours 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 Amsterdam Commodities and Holland Colours into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amsterdam Commodities NV and Holland Colours NV, you can compare the effects of market volatilities on Amsterdam Commodities and Holland Colours 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 Amsterdam Commodities with a short position of Holland Colours. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amsterdam Commodities and Holland Colours.
Diversification Opportunities for Amsterdam Commodities and Holland Colours
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Amsterdam and Holland is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Amsterdam Commodities NV and Holland Colours NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holland Colours NV and Amsterdam Commodities 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 Amsterdam Commodities NV are associated (or correlated) with Holland Colours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holland Colours NV has no effect on the direction of Amsterdam Commodities i.e., Amsterdam Commodities and Holland Colours go up and down completely randomly.
Pair Corralation between Amsterdam Commodities and Holland Colours
Assuming the 90 days trading horizon Amsterdam Commodities NV is expected to generate 0.44 times more return on investment than Holland Colours. However, Amsterdam Commodities NV is 2.27 times less risky than Holland Colours. It trades about 0.01 of its potential returns per unit of risk. Holland Colours NV is currently generating about -0.02 per unit of risk. If you would invest 1,720 in Amsterdam Commodities NV on September 3, 2024 and sell it today you would earn a total of 30.00 from holding Amsterdam Commodities NV or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.41% |
| Values | Daily Returns |
Amsterdam Commodities NV vs. Holland Colours NV
Performance |
| Timeline |
| Amsterdam Commodities |
| Holland Colours NV |
Amsterdam Commodities and Holland Colours Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amsterdam Commodities and Holland Colours
The main advantage of trading using opposite Amsterdam Commodities and Holland Colours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amsterdam Commodities position performs unexpectedly, Holland Colours 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 Holland Colours will offset losses from the drop in Holland Colours' long position.| Amsterdam Commodities vs. TKH Group NV | Amsterdam Commodities vs. Aalberts Industries NV | Amsterdam Commodities vs. Arcadis NV | Amsterdam Commodities vs. Koninklijke Vopak NV |
| Holland Colours vs. NV Nederlandsche Apparatenfabriek | Holland Colours vs. Hydratec Industries NV | Holland Colours vs. Amsterdam Commodities NV | Holland Colours vs. Aalberts Industries 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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