Correlation Between Flow Traders and Koninklijke Ahold
Can any of the company-specific risk be diversified away by investing in both Flow Traders and Koninklijke Ahold 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 Koninklijke Ahold 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 Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Flow Traders and Koninklijke Ahold 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 Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and Koninklijke Ahold.
Diversification Opportunities for Flow Traders and Koninklijke Ahold
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Flow and Koninklijke is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders BV and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold 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 Koninklijke Ahold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Ahold has no effect on the direction of Flow Traders i.e., Flow Traders and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Flow Traders and Koninklijke Ahold
Assuming the 90 days trading horizon Flow Traders is expected to generate 13.31 times less return on investment than Koninklijke Ahold. In addition to that, Flow Traders is 1.46 times more volatile than Koninklijke Ahold Delhaize. It trades about 0.02 of its total potential returns per unit of risk. Koninklijke Ahold Delhaize is currently generating about 0.3 per unit of volatility. If you would invest 3,031 in Koninklijke Ahold Delhaize on September 1, 2024 and sell it today you would earn a total of 234.00 from holding Koninklijke Ahold Delhaize or generate 7.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flow Traders BV vs. Koninklijke Ahold Delhaize
Performance |
| Timeline |
| Flow Traders BV |
| Koninklijke Ahold |
Flow Traders and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Traders and Koninklijke Ahold
The main advantage of trading using opposite Flow Traders and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders position performs unexpectedly, Koninklijke Ahold 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 Koninklijke Ahold will offset losses from the drop in Koninklijke Ahold's long position.| Flow Traders vs. Aegon NV | Flow Traders vs. ABN Amro Group | Flow Traders vs. Koninklijke Philips NV | Flow Traders vs. Unilever PLC |
| Koninklijke Ahold vs. TKH Group NV | Koninklijke Ahold vs. Brunel International NV | Koninklijke Ahold vs. Koninklijke BAM Groep | Koninklijke Ahold 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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