Correlation Between ASR Nederland and IMCD NV
Can any of the company-specific risk be diversified away by investing in both ASR Nederland and IMCD NV 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 ASR Nederland and IMCD NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASR Nederland NV and IMCD NV, you can compare the effects of market volatilities on ASR Nederland and IMCD NV 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 ASR Nederland with a short position of IMCD NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASR Nederland and IMCD NV.
Diversification Opportunities for ASR Nederland and IMCD NV
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASR and IMCD is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ASR Nederland NV and IMCD NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMCD NV and ASR Nederland 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 ASR Nederland NV are associated (or correlated) with IMCD NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMCD NV has no effect on the direction of ASR Nederland i.e., ASR Nederland and IMCD NV go up and down completely randomly.
Pair Corralation between ASR Nederland and IMCD NV
Assuming the 90 days trading horizon ASR Nederland NV is expected to generate 0.72 times more return on investment than IMCD NV. However, ASR Nederland NV is 1.38 times less risky than IMCD NV. It trades about 0.03 of its potential returns per unit of risk. IMCD NV is currently generating about -0.17 per unit of risk. If you would invest 4,475 in ASR Nederland NV on August 27, 2024 and sell it today you would earn a total of 38.00 from holding ASR Nederland NV or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASR Nederland NV vs. IMCD NV
Performance |
| Timeline |
| ASR Nederland NV |
| IMCD NV |
ASR Nederland and IMCD NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASR Nederland and IMCD NV
The main advantage of trading using opposite ASR Nederland and IMCD NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASR Nederland position performs unexpectedly, IMCD NV 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 IMCD NV will offset losses from the drop in IMCD NV's long position.| ASR Nederland vs. NN Group NV | ASR Nederland vs. Koninklijke Ahold Delhaize | ASR Nederland vs. BE Semiconductor Industries | ASR Nederland vs. Aegon NV |
| IMCD NV vs. Wolters Kluwer NV | IMCD NV vs. Aalberts Industries NV | IMCD NV vs. ASM International NV | IMCD NV 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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