Correlation Between CM NV and ASR Nederland
Can any of the company-specific risk be diversified away by investing in both CM NV and ASR Nederland 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 CM NV and ASR Nederland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CM NV and ASR Nederland NV, you can compare the effects of market volatilities on CM NV and ASR Nederland 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 CM NV with a short position of ASR Nederland. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM NV and ASR Nederland.
Diversification Opportunities for CM NV and ASR Nederland
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between CMCOM and ASR is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding CM NV and ASR Nederland NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASR Nederland NV and CM 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 CM NV are associated (or correlated) with ASR Nederland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASR Nederland NV has no effect on the direction of CM NV i.e., CM NV and ASR Nederland go up and down completely randomly.
Pair Corralation between CM NV and ASR Nederland
Assuming the 90 days trading horizon CM NV is expected to under-perform the ASR Nederland. But the stock apears to be less risky and, when comparing its historical volatility, CM NV is 1.29 times less risky than ASR Nederland. The stock trades about -0.37 of its potential returns per unit of risk. The ASR Nederland NV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,394 in ASR Nederland NV on August 31, 2024 and sell it today you would earn a total of 67.00 from holding ASR Nederland NV or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CM NV vs. ASR Nederland NV
Performance |
| Timeline |
| CM NV |
| ASR Nederland NV |
CM NV and ASR Nederland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CM NV and ASR Nederland
The main advantage of trading using opposite CM NV and ASR Nederland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM NV position performs unexpectedly, ASR Nederland 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 ASR Nederland will offset losses from the drop in ASR Nederland's long position.| CM NV vs. Just Eat Takeaway | CM NV vs. Alfen Beheer BV | CM NV vs. BE Semiconductor Industries | CM NV vs. Basic Fit NV |
| ASR Nederland vs. NN Group NV | ASR Nederland vs. Koninklijke Ahold Delhaize | ASR Nederland vs. BE Semiconductor Industries | ASR Nederland vs. Aegon 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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