Correlation Between Amsterdam Commodities and U Blox
Can any of the company-specific risk be diversified away by investing in both Amsterdam Commodities and U Blox 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 U Blox 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 U Blox Holding, you can compare the effects of market volatilities on Amsterdam Commodities and U Blox 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 U Blox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amsterdam Commodities and U Blox.
Diversification Opportunities for Amsterdam Commodities and U Blox
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Amsterdam and UBXN is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Amsterdam Commodities NV and U Blox Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Blox Holding 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 U Blox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Blox Holding has no effect on the direction of Amsterdam Commodities i.e., Amsterdam Commodities and U Blox go up and down completely randomly.
Pair Corralation between Amsterdam Commodities and U Blox
Assuming the 90 days trading horizon Amsterdam Commodities is expected to generate 20.81 times less return on investment than U Blox. But when comparing it to its historical volatility, Amsterdam Commodities NV is 1.65 times less risky than U Blox. It trades about 0.01 of its potential returns per unit of risk. U Blox Holding is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6,630 in U Blox Holding on September 2, 2024 and sell it today you would earn a total of 290.00 from holding U Blox Holding or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amsterdam Commodities NV vs. U Blox Holding
Performance |
| Timeline |
| Amsterdam Commodities |
| U Blox Holding |
Amsterdam Commodities and U Blox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amsterdam Commodities and U Blox
The main advantage of trading using opposite Amsterdam Commodities and U Blox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amsterdam Commodities position performs unexpectedly, U Blox 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 U Blox will offset losses from the drop in U Blox's long position.| Amsterdam Commodities vs. Flow Traders BV | Amsterdam Commodities vs. Aalberts Industries NV | Amsterdam Commodities vs. ForFarmers NV | Amsterdam Commodities vs. TKH Group NV |
| U Blox vs. Jungfraubahn Holding AG | U Blox vs. Amsterdam Commodities NV | U Blox vs. Flow Traders BV | U Blox vs. ForFarmers 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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