Correlation Between Koninklijke Ahold and Adyen NV
Can any of the company-specific risk be diversified away by investing in both Koninklijke Ahold and Adyen 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 Koninklijke Ahold and Adyen NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke Ahold Delhaize and Adyen NV, you can compare the effects of market volatilities on Koninklijke Ahold and Adyen 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 Koninklijke Ahold with a short position of Adyen NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Ahold and Adyen NV.
Diversification Opportunities for Koninklijke Ahold and Adyen NV
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Koninklijke and Adyen is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Ahold Delhaize and Adyen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adyen NV and Koninklijke Ahold 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 Koninklijke Ahold Delhaize are associated (or correlated) with Adyen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adyen NV has no effect on the direction of Koninklijke Ahold i.e., Koninklijke Ahold and Adyen NV go up and down completely randomly.
Pair Corralation between Koninklijke Ahold and Adyen NV
Assuming the 90 days horizon Koninklijke Ahold is expected to generate 2.17 times less return on investment than Adyen NV. But when comparing it to its historical volatility, Koninklijke Ahold Delhaize is 3.63 times less risky than Adyen NV. It trades about 0.03 of its potential returns per unit of risk. Adyen NV is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 144,380 in Adyen NV on August 29, 2024 and sell it today you would lose (5,860) from holding Adyen NV or give up 4.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke Ahold Delhaize vs. Adyen NV
Performance |
| Timeline |
| Koninklijke Ahold |
| Adyen NV |
Koninklijke Ahold and Adyen NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Ahold and Adyen NV
The main advantage of trading using opposite Koninklijke Ahold and Adyen NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Ahold position performs unexpectedly, Adyen 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 Adyen NV will offset losses from the drop in Adyen NV's long position.| Koninklijke Ahold vs. Unilever PLC | Koninklijke Ahold vs. Koninklijke Philips NV | Koninklijke Ahold vs. NN Group NV | Koninklijke Ahold vs. ING Groep NV |
| Adyen NV vs. ASML Holding NV | Adyen NV vs. Prosus NV | Adyen NV vs. Just Eat Takeaway | Adyen NV vs. Koninklijke Ahold Delhaize |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |