Correlation Between AEX Amsterdam and Reinet Investments
Can any of the company-specific risk be diversified away by investing in both AEX Amsterdam and Reinet Investments 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 AEX Amsterdam and Reinet Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEX Amsterdam Index and Reinet Investments SCA, you can compare the effects of market volatilities on AEX Amsterdam and Reinet Investments 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 AEX Amsterdam with a short position of Reinet Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEX Amsterdam and Reinet Investments.
Diversification Opportunities for AEX Amsterdam and Reinet Investments
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AEX and Reinet is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding AEX Amsterdam Index and Reinet Investments SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinet Investments SCA and AEX Amsterdam 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 AEX Amsterdam Index are associated (or correlated) with Reinet Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reinet Investments SCA has no effect on the direction of AEX Amsterdam i.e., AEX Amsterdam and Reinet Investments go up and down completely randomly.
Pair Corralation between AEX Amsterdam and Reinet Investments
Assuming the 90 days trading horizon AEX Amsterdam Index is expected to under-perform the Reinet Investments. But the index apears to be less risky and, when comparing its historical volatility, AEX Amsterdam Index is 2.99 times less risky than Reinet Investments. The index trades about -0.03 of its potential returns per unit of risk. The Reinet Investments SCA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,306 in Reinet Investments SCA on September 3, 2024 and sell it today you would earn a total of 174.00 from holding Reinet Investments SCA or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEX Amsterdam Index vs. Reinet Investments SCA
Performance |
| Timeline |
AEX Amsterdam and Reinet Investments Volatility Contrast
Predicted Return Density |
| Returns |
AEX Amsterdam Index
Pair trading matchups for AEX Amsterdam
Reinet Investments SCA
Pair trading matchups for Reinet Investments
Pair Trading with AEX Amsterdam and Reinet Investments
The main advantage of trading using opposite AEX Amsterdam and Reinet Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEX Amsterdam position performs unexpectedly, Reinet Investments 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 Reinet Investments will offset losses from the drop in Reinet Investments' long position.| AEX Amsterdam vs. SBM Offshore NV | AEX Amsterdam vs. AMG Advanced Metallurgical | AEX Amsterdam vs. BE Semiconductor Industries | AEX Amsterdam vs. Sligro Food Group |
| Reinet Investments vs. Companhia Paranaense de | Reinet Investments vs. Quest For Growth | Reinet Investments vs. Hydratec Industries NV | Reinet Investments vs. iShares Property Yield |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |