Correlation Between Arcadis NV and Koninklijke BAM
Can any of the company-specific risk be diversified away by investing in both Arcadis NV and Koninklijke BAM 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 Arcadis NV and Koninklijke BAM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcadis NV and Koninklijke BAM Groep, you can compare the effects of market volatilities on Arcadis NV and Koninklijke BAM 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 Arcadis NV with a short position of Koninklijke BAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcadis NV and Koninklijke BAM.
Diversification Opportunities for Arcadis NV and Koninklijke BAM
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Arcadis and Koninklijke is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Arcadis NV and Koninklijke BAM Groep in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke BAM Groep and Arcadis 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 Arcadis NV are associated (or correlated) with Koninklijke BAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke BAM Groep has no effect on the direction of Arcadis NV i.e., Arcadis NV and Koninklijke BAM go up and down completely randomly.
Pair Corralation between Arcadis NV and Koninklijke BAM
Assuming the 90 days trading horizon Arcadis NV is expected to generate 0.9 times more return on investment than Koninklijke BAM. However, Arcadis NV is 1.11 times less risky than Koninklijke BAM. It trades about -0.12 of its potential returns per unit of risk. Koninklijke BAM Groep is currently generating about -0.17 per unit of risk. If you would invest 6,470 in Arcadis NV on September 2, 2024 and sell it today you would lose (225.00) from holding Arcadis NV or give up 3.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcadis NV vs. Koninklijke BAM Groep
Performance |
| Timeline |
| Arcadis NV |
| Koninklijke BAM Groep |
Arcadis NV and Koninklijke BAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcadis NV and Koninklijke BAM
The main advantage of trading using opposite Arcadis NV and Koninklijke BAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcadis NV position performs unexpectedly, Koninklijke BAM 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 Koninklijke BAM will offset losses from the drop in Koninklijke BAM's long position.| Arcadis NV vs. Aalberts Industries NV | Arcadis NV vs. TKH Group NV | Arcadis NV vs. Koninklijke BAM Groep | Arcadis NV vs. SBM Offshore NV |
| Koninklijke BAM vs. PostNL NV | Koninklijke BAM vs. ForFarmers NV | Koninklijke BAM vs. Flow Traders BV | Koninklijke BAM vs. ASR Nederland 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |