Correlation Between Emmi AG and Amsterdam Commodities
Can any of the company-specific risk be diversified away by investing in both Emmi AG and Amsterdam Commodities 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 Emmi AG and Amsterdam Commodities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emmi AG and Amsterdam Commodities NV, you can compare the effects of market volatilities on Emmi AG and Amsterdam Commodities 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 Emmi AG with a short position of Amsterdam Commodities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emmi AG and Amsterdam Commodities.
Diversification Opportunities for Emmi AG and Amsterdam Commodities
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Emmi and Amsterdam is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Emmi AG and Amsterdam Commodities NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amsterdam Commodities and Emmi AG 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 Emmi AG are associated (or correlated) with Amsterdam Commodities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amsterdam Commodities has no effect on the direction of Emmi AG i.e., Emmi AG and Amsterdam Commodities go up and down completely randomly.
Pair Corralation between Emmi AG and Amsterdam Commodities
Assuming the 90 days trading horizon Emmi AG is expected to generate 8.5 times less return on investment than Amsterdam Commodities. In addition to that, Emmi AG is 1.11 times more volatile than Amsterdam Commodities NV. It trades about 0.0 of its total potential returns per unit of risk. Amsterdam Commodities NV is currently generating about 0.01 per unit of volatility. If you would invest 1,720 in Amsterdam Commodities NV on September 3, 2024 and sell it today you would earn a total of 30.00 from holding Amsterdam Commodities NV or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.42% |
| Values | Daily Returns |
Emmi AG vs. Amsterdam Commodities NV
Performance |
| Timeline |
| Emmi AG |
| Amsterdam Commodities |
Emmi AG and Amsterdam Commodities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emmi AG and Amsterdam Commodities
The main advantage of trading using opposite Emmi AG and Amsterdam Commodities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emmi AG position performs unexpectedly, Amsterdam Commodities 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 Amsterdam Commodities will offset losses from the drop in Amsterdam Commodities' long position.| Emmi AG vs. Bucher Industries AG | Emmi AG vs. EMS CHEMIE HOLDING AG | Emmi AG vs. Barry Callebaut AG | Emmi AG vs. Geberit AG |
| Amsterdam Commodities vs. TKH Group NV | Amsterdam Commodities vs. Aalberts Industries NV | Amsterdam Commodities vs. Arcadis NV | Amsterdam Commodities vs. Koninklijke Vopak 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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