Correlation Between Flow Traders and Amsterdam Commodities
Can any of the company-specific risk be diversified away by investing in both Flow Traders 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 Flow Traders and Amsterdam Commodities 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 Amsterdam Commodities NV, you can compare the effects of market volatilities on Flow Traders 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 Flow Traders with a short position of Amsterdam Commodities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and Amsterdam Commodities.
Diversification Opportunities for Flow Traders and Amsterdam Commodities
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flow and Amsterdam is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders BV and Amsterdam Commodities NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amsterdam Commodities 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 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 Flow Traders i.e., Flow Traders and Amsterdam Commodities go up and down completely randomly.
Pair Corralation between Flow Traders and Amsterdam Commodities
Assuming the 90 days trading horizon Flow Traders BV is expected to generate 1.56 times more return on investment than Amsterdam Commodities. However, Flow Traders is 1.56 times more volatile than Amsterdam Commodities NV. It trades about 0.01 of its potential returns per unit of risk. Amsterdam Commodities NV is currently generating about -0.08 per unit of risk. If you would invest 2,136 in Flow Traders BV on August 25, 2024 and sell it today you would earn a total of 2.00 from holding Flow Traders BV or generate 0.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flow Traders BV vs. Amsterdam Commodities NV
Performance |
| Timeline |
| Flow Traders BV |
| Amsterdam Commodities |
Flow Traders and Amsterdam Commodities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Traders and Amsterdam Commodities
The main advantage of trading using opposite Flow Traders and Amsterdam Commodities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders 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.| Flow Traders vs. NN Group NV | Flow Traders vs. BE Semiconductor Industries | Flow Traders vs. Koninklijke Ahold Delhaize | Flow Traders vs. ASR Nederland NV |
| Amsterdam Commodities vs. Flow Traders BV | Amsterdam Commodities vs. Aalberts Industries NV | Amsterdam Commodities vs. ForFarmers NV | Amsterdam Commodities vs. TKH Group 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 Stocks Directory module to find actively traded stocks across global markets.
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