Correlation Between Koninklijke BAM and AFC Ajax
Can any of the company-specific risk be diversified away by investing in both Koninklijke BAM and AFC Ajax 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 Koninklijke BAM and AFC Ajax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke BAM Groep and AFC Ajax NV, you can compare the effects of market volatilities on Koninklijke BAM and AFC Ajax 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 Koninklijke BAM with a short position of AFC Ajax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke BAM and AFC Ajax.
Diversification Opportunities for Koninklijke BAM and AFC Ajax
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Koninklijke and AFC is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke BAM Groep and AFC Ajax NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Ajax NV and Koninklijke BAM 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 Koninklijke BAM Groep are associated (or correlated) with AFC Ajax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Ajax NV has no effect on the direction of Koninklijke BAM i.e., Koninklijke BAM and AFC Ajax go up and down completely randomly.
Pair Corralation between Koninklijke BAM and AFC Ajax
Assuming the 90 days trading horizon Koninklijke BAM Groep is expected to generate 2.52 times more return on investment than AFC Ajax. However, Koninklijke BAM is 2.52 times more volatile than AFC Ajax NV. It trades about 0.12 of its potential returns per unit of risk. AFC Ajax NV is currently generating about 0.0 per unit of risk. If you would invest 377.00 in Koninklijke BAM Groep on November 28, 2024 and sell it today you would earn a total of 116.00 from holding Koninklijke BAM Groep or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke BAM Groep vs. AFC Ajax NV
Performance |
| Timeline |
| Koninklijke BAM Groep |
| AFC Ajax NV |
Koninklijke BAM and AFC Ajax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke BAM and AFC Ajax
The main advantage of trading using opposite Koninklijke BAM and AFC Ajax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke BAM position performs unexpectedly, AFC Ajax 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 AFC Ajax will offset losses from the drop in AFC Ajax's long position.| Koninklijke BAM vs. Fugro NV | Koninklijke BAM vs. SBM Offshore NV | Koninklijke BAM vs. Aegon NV | Koninklijke BAM vs. PostNL NV |
| AFC Ajax vs. AMG Advanced Metallurgical | AFC Ajax vs. Reinet Investments SCA | AFC Ajax vs. Sligro Food Group | AFC Ajax vs. Allfunds Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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