Correlation Between Avantium Holding and Koninklijke BAM
Can any of the company-specific risk be diversified away by investing in both Avantium Holding 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 Avantium Holding and Koninklijke BAM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avantium Holding BV and Koninklijke BAM Groep, you can compare the effects of market volatilities on Avantium Holding 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 Avantium Holding with a short position of Koninklijke BAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantium Holding and Koninklijke BAM.
Diversification Opportunities for Avantium Holding and Koninklijke BAM
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Avantium and Koninklijke is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Avantium Holding BV 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 Avantium Holding 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 Avantium Holding BV 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 Avantium Holding i.e., Avantium Holding and Koninklijke BAM go up and down completely randomly.
Pair Corralation between Avantium Holding and Koninklijke BAM
Assuming the 90 days trading horizon Avantium Holding BV is expected to under-perform the Koninklijke BAM. In addition to that, Avantium Holding is 1.33 times more volatile than Koninklijke BAM Groep. It trades about -0.32 of its total potential returns per unit of risk. Koninklijke BAM Groep is currently generating about -0.31 per unit of volatility. If you would invest 435.00 in Koninklijke BAM Groep on August 30, 2024 and sell it today you would lose (41.00) from holding Koninklijke BAM Groep or give up 9.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avantium Holding BV vs. Koninklijke BAM Groep
Performance |
| Timeline |
| Avantium Holding |
| Koninklijke BAM Groep |
Avantium Holding and Koninklijke BAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantium Holding and Koninklijke BAM
The main advantage of trading using opposite Avantium Holding and Koninklijke BAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantium Holding 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.| Avantium Holding vs. Akzo Nobel NV | Avantium Holding vs. Koninklijke KPN NV | Avantium Holding vs. Aegon NV | Avantium Holding vs. BlackRock ESG Multi Asset |
| Koninklijke BAM vs. Fugro NV | Koninklijke BAM vs. SBM Offshore NV | Koninklijke BAM vs. Aegon NV | Koninklijke BAM vs. PostNL 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |