Correlation Between Hydratec Industries and VanEck AEX
Can any of the company-specific risk be diversified away by investing in both Hydratec Industries and VanEck AEX 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 Hydratec Industries and VanEck AEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hydratec Industries NV and VanEck AEX UCITS, you can compare the effects of market volatilities on Hydratec Industries and VanEck AEX 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 Hydratec Industries with a short position of VanEck AEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydratec Industries and VanEck AEX.
Diversification Opportunities for Hydratec Industries and VanEck AEX
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hydratec and VanEck is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hydratec Industries NV and VanEck AEX UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck AEX UCITS and Hydratec Industries 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 Hydratec Industries NV are associated (or correlated) with VanEck AEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck AEX UCITS has no effect on the direction of Hydratec Industries i.e., Hydratec Industries and VanEck AEX go up and down completely randomly.
Pair Corralation between Hydratec Industries and VanEck AEX
Assuming the 90 days trading horizon Hydratec Industries NV is expected to generate 3.09 times more return on investment than VanEck AEX. However, Hydratec Industries is 3.09 times more volatile than VanEck AEX UCITS. It trades about 0.09 of its potential returns per unit of risk. VanEck AEX UCITS is currently generating about 0.02 per unit of risk. If you would invest 13,900 in Hydratec Industries NV on September 12, 2024 and sell it today you would earn a total of 1,900 from holding Hydratec Industries NV or generate 13.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hydratec Industries NV vs. VanEck AEX UCITS
Performance |
| Timeline |
| Hydratec Industries |
| VanEck AEX UCITS |
Hydratec Industries and VanEck AEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hydratec Industries and VanEck AEX
The main advantage of trading using opposite Hydratec Industries and VanEck AEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hydratec Industries position performs unexpectedly, VanEck AEX 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 VanEck AEX will offset losses from the drop in VanEck AEX's long position.| Hydratec Industries vs. Holland Colours NV | Hydratec Industries vs. NV Nederlandsche Apparatenfabriek | Hydratec Industries vs. Amsterdam Commodities NV | Hydratec Industries vs. TKH Group NV |
| VanEck AEX vs. VanEck Global Real | VanEck AEX vs. VanEck Sustainable World | VanEck AEX vs. VanEck Morningstar Developed | VanEck AEX vs. Vanguard SP 500 |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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