Correlation Between Flow Traders and Allfunds
Can any of the company-specific risk be diversified away by investing in both Flow Traders and Allfunds 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 Allfunds 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 Allfunds Group, you can compare the effects of market volatilities on Flow Traders and Allfunds 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 Allfunds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and Allfunds.
Diversification Opportunities for Flow Traders and Allfunds
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Flow and Allfunds is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders BV and Allfunds Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allfunds 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 Allfunds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allfunds Group has no effect on the direction of Flow Traders i.e., Flow Traders and Allfunds go up and down completely randomly.
Pair Corralation between Flow Traders and Allfunds
Assuming the 90 days trading horizon Flow Traders BV is expected to generate 0.72 times more return on investment than Allfunds. However, Flow Traders BV is 1.4 times less risky than Allfunds. It trades about 0.21 of its potential returns per unit of risk. Allfunds Group is currently generating about 0.07 per unit of risk. If you would invest 1,743 in Flow Traders BV on September 4, 2024 and sell it today you would earn a total of 347.00 from holding Flow Traders BV or generate 19.91% 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. Allfunds Group
Performance |
| Timeline |
| Flow Traders BV |
| Allfunds Group |
Flow Traders and Allfunds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Traders and Allfunds
The main advantage of trading using opposite Flow Traders and Allfunds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders position performs unexpectedly, Allfunds 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 Allfunds will offset losses from the drop in Allfunds' long position.| Flow Traders vs. Aegon NV | Flow Traders vs. ABN Amro Group | Flow Traders vs. Koninklijke Philips NV | Flow Traders vs. Unilever PLC |
| Allfunds vs. Instalco Intressenter AB | Allfunds vs. Euronext NV | Allfunds vs. Linea Directa Aseguradora | Allfunds vs. Pershing Square Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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