Correlation Between Allfunds and Flow Traders
Can any of the company-specific risk be diversified away by investing in both Allfunds and Flow Traders 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 Allfunds and Flow Traders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allfunds Group and Flow Traders BV, you can compare the effects of market volatilities on Allfunds and Flow Traders 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 Allfunds with a short position of Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allfunds and Flow Traders.
Diversification Opportunities for Allfunds and Flow Traders
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Allfunds and Flow is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Allfunds Group and Flow Traders BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Traders BV and Allfunds 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 Allfunds Group are associated (or correlated) with Flow Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Traders BV has no effect on the direction of Allfunds i.e., Allfunds and Flow Traders go up and down completely randomly.
Pair Corralation between Allfunds and Flow Traders
Assuming the 90 days trading horizon Allfunds is expected to generate 2.02 times less return on investment than Flow Traders. In addition to that, Allfunds is 1.4 times more volatile than Flow Traders BV. It trades about 0.07 of its total potential returns per unit of risk. Flow Traders BV is currently generating about 0.21 per unit of volatility. If you would invest 1,743 in Flow Traders BV on September 4, 2024 and sell it today you would earn a total of 347.00 from holding Flow Traders BV or generate 19.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allfunds Group vs. Flow Traders BV
Performance |
| Timeline |
| Allfunds Group |
| Flow Traders BV |
Allfunds and Flow Traders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allfunds and Flow Traders
The main advantage of trading using opposite Allfunds and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allfunds position performs unexpectedly, Flow Traders 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 Flow Traders will offset losses from the drop in Flow Traders' long position.| Allfunds vs. Instalco Intressenter AB | Allfunds vs. Euronext NV | Allfunds vs. Linea Directa Aseguradora | Allfunds vs. Pershing Square Holdings |
| Flow Traders vs. Aegon NV | Flow Traders vs. ABN Amro Group | Flow Traders vs. Koninklijke Philips NV | Flow Traders vs. Unilever PLC |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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