Correlation Between Flow Traders and ABN Amro
Can any of the company-specific risk be diversified away by investing in both Flow Traders and ABN Amro 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 Flow Traders and ABN Amro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Traders BV and ABN Amro Group, you can compare the effects of market volatilities on Flow Traders and ABN Amro 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 Flow Traders with a short position of ABN Amro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and ABN Amro.
Diversification Opportunities for Flow Traders and ABN Amro
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flow and ABN is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders BV and ABN Amro Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABN Amro Group and Flow Traders 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 Flow Traders BV are associated (or correlated) with ABN Amro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABN Amro Group has no effect on the direction of Flow Traders i.e., Flow Traders and ABN Amro go up and down completely randomly.
Pair Corralation between Flow Traders and ABN Amro
Assuming the 90 days trading horizon Flow Traders BV is expected to generate 1.36 times more return on investment than ABN Amro. However, Flow Traders is 1.36 times more volatile than ABN Amro Group. It trades about 0.1 of its potential returns per unit of risk. ABN Amro Group is currently generating about -0.18 per unit of risk. If you would invest 2,046 in Flow Traders BV on September 3, 2024 and sell it today you would earn a total of 64.00 from holding Flow Traders BV or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flow Traders BV vs. ABN Amro Group
Performance |
| Timeline |
| Flow Traders BV |
| ABN Amro Group |
Flow Traders and ABN Amro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Traders and ABN Amro
The main advantage of trading using opposite Flow Traders and ABN Amro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders position performs unexpectedly, ABN Amro 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 ABN Amro will offset losses from the drop in ABN Amro's long position.| Flow Traders vs. NN Group NV | Flow Traders vs. BE Semiconductor Industries | Flow Traders vs. Koninklijke Ahold Delhaize | Flow Traders vs. ASR Nederland NV |
| ABN Amro vs. ING Groep NV | ABN Amro vs. Aegon NV | ABN Amro vs. NN Group NV | ABN Amro vs. Koninklijke Ahold Delhaize |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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