Correlation Between Adyen NV and AMS Small
Can any of the company-specific risk be diversified away by investing in both Adyen NV and AMS Small 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 Adyen NV and AMS Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adyen NV and AMS Small Cap, you can compare the effects of market volatilities on Adyen NV and AMS Small 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 Adyen NV with a short position of AMS Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adyen NV and AMS Small.
Diversification Opportunities for Adyen NV and AMS Small
Poor diversification
The 3 months correlation between Adyen and AMS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Adyen NV and AMS Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMS Small Cap and Adyen NV 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 Adyen NV are associated (or correlated) with AMS Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMS Small Cap has no effect on the direction of Adyen NV i.e., Adyen NV and AMS Small go up and down completely randomly.
Pair Corralation between Adyen NV and AMS Small
Assuming the 90 days trading horizon Adyen NV is expected to generate 2.72 times more return on investment than AMS Small. However, Adyen NV is 2.72 times more volatile than AMS Small Cap. It trades about 0.05 of its potential returns per unit of risk. AMS Small Cap is currently generating about -0.01 per unit of risk. If you would invest 111,980 in Adyen NV on August 29, 2024 and sell it today you would earn a total of 26,540 from holding Adyen NV or generate 23.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Adyen NV vs. AMS Small Cap
Performance |
| Timeline |
Adyen NV and AMS Small Volatility Contrast
Predicted Return Density |
| Returns |
Adyen NV
Pair trading matchups for Adyen NV
AMS Small Cap
Pair trading matchups for AMS Small
Pair Trading with Adyen NV and AMS Small
The main advantage of trading using opposite Adyen NV and AMS Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adyen NV position performs unexpectedly, AMS Small 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 AMS Small will offset losses from the drop in AMS Small's long position.| Adyen NV vs. ASML Holding NV | Adyen NV vs. Prosus NV | Adyen NV vs. Just Eat Takeaway | Adyen NV vs. Koninklijke Ahold Delhaize |
| AMS Small vs. SBM Offshore NV | AMS Small vs. AMG Advanced Metallurgical | AMS Small vs. BE Semiconductor Industries | AMS Small vs. Flow Traders BV |
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.
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