Correlation Between Arcadis NV and Stem
Can any of the company-specific risk be diversified away by investing in both Arcadis NV and Stem 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 Stem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcadis NV and Stem Inc, you can compare the effects of market volatilities on Arcadis NV and Stem 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 Stem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcadis NV and Stem.
Diversification Opportunities for Arcadis NV and Stem
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arcadis and Stem is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Arcadis NV and Stem Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stem Inc 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 Stem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stem Inc has no effect on the direction of Arcadis NV i.e., Arcadis NV and Stem go up and down completely randomly.
Pair Corralation between Arcadis NV and Stem
Assuming the 90 days horizon Arcadis NV is expected to generate 0.35 times more return on investment than Stem. However, Arcadis NV is 2.85 times less risky than Stem. It trades about 0.04 of its potential returns per unit of risk. Stem Inc is currently generating about -0.03 per unit of risk. If you would invest 4,492 in Arcadis NV on November 2, 2024 and sell it today you would earn a total of 1,343 from holding Arcadis NV or generate 29.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 77.94% |
| Values | Daily Returns |
Arcadis NV vs. Stem Inc
Performance |
| Timeline |
| Arcadis NV |
| Stem Inc |
Arcadis NV and Stem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcadis NV and Stem
The main advantage of trading using opposite Arcadis NV and Stem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcadis NV position performs unexpectedly, Stem 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 Stem will offset losses from the drop in Stem's long position.| Arcadis NV vs. Arcadis NV | Arcadis NV vs. BE Semiconductor Industries | Arcadis NV vs. Arkema SA ADR | Arcadis NV vs. Assa Abloy AB |
| Stem vs. Palo Alto Networks | Stem vs. Crowdstrike Holdings | Stem vs. Cloudflare | Stem vs. Palantir Technologies Class |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |