Correlation Between AMS Small and Aalberts Industries
Can any of the company-specific risk be diversified away by investing in both AMS Small and Aalberts Industries 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 AMS Small and Aalberts Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMS Small Cap and Aalberts Industries NV, you can compare the effects of market volatilities on AMS Small and Aalberts Industries 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 AMS Small with a short position of Aalberts Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMS Small and Aalberts Industries.
Diversification Opportunities for AMS Small and Aalberts Industries
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AMS and Aalberts is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding AMS Small Cap and Aalberts Industries NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aalberts Industries and AMS Small 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 AMS Small Cap are associated (or correlated) with Aalberts Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aalberts Industries has no effect on the direction of AMS Small i.e., AMS Small and Aalberts Industries go up and down completely randomly.
Pair Corralation between AMS Small and Aalberts Industries
Assuming the 90 days trading horizon AMS Small Cap is expected to generate 0.51 times more return on investment than Aalberts Industries. However, AMS Small Cap is 1.94 times less risky than Aalberts Industries. It trades about -0.01 of its potential returns per unit of risk. Aalberts Industries NV is currently generating about -0.21 per unit of risk. If you would invest 139,656 in AMS Small Cap on January 23, 2025 and sell it today you would lose (882.00) from holding AMS Small Cap or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMS Small Cap vs. Aalberts Industries NV
Performance |
| Timeline |
AMS Small and Aalberts Industries Volatility Contrast
Predicted Return Density |
| Returns |
AMS Small Cap
Pair trading matchups for AMS Small
Aalberts Industries NV
Pair trading matchups for Aalberts Industries
Pair Trading with AMS Small and Aalberts Industries
The main advantage of trading using opposite AMS Small and Aalberts Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMS Small position performs unexpectedly, Aalberts Industries 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 Aalberts Industries will offset losses from the drop in Aalberts Industries' long position.| AMS Small vs. AMG Advanced Metallurgical | AMS Small vs. SBM Offshore NV | AMS Small vs. Allfunds Group | AMS Small vs. Reinet Investments SCA |
| Aalberts Industries vs. TKH Group NV | Aalberts Industries vs. Koninklijke Vopak NV | Aalberts Industries vs. Randstad NV | Aalberts Industries vs. SBM Offshore 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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