Correlation Between PostNL NV and Flow Traders
Can any of the company-specific risk be diversified away by investing in both PostNL NV and Flow Traders 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 PostNL NV and Flow Traders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PostNL NV and Flow Traders BV, you can compare the effects of market volatilities on PostNL NV and Flow Traders 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 PostNL NV with a short position of Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of PostNL NV and Flow Traders.
Diversification Opportunities for PostNL NV and Flow Traders
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PostNL and Flow is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding PostNL NV and Flow Traders BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Traders BV and PostNL NV 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 PostNL NV are associated (or correlated) with Flow Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Traders BV has no effect on the direction of PostNL NV i.e., PostNL NV and Flow Traders go up and down completely randomly.
Pair Corralation between PostNL NV and Flow Traders
Assuming the 90 days trading horizon PostNL NV is expected to under-perform the Flow Traders. In addition to that, PostNL NV is 1.28 times more volatile than Flow Traders BV. It trades about -0.14 of its total potential returns per unit of risk. Flow Traders BV is currently generating about 0.07 per unit of volatility. If you would invest 2,076 in Flow Traders BV on August 31, 2024 and sell it today you would earn a total of 46.00 from holding Flow Traders BV or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PostNL NV vs. Flow Traders BV
Performance |
| Timeline |
| PostNL NV |
| Flow Traders BV |
PostNL NV and Flow Traders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PostNL NV and Flow Traders
The main advantage of trading using opposite PostNL NV and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PostNL NV position performs unexpectedly, Flow Traders 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 Flow Traders will offset losses from the drop in Flow Traders' long position.| PostNL NV vs. Koninklijke Ahold Delhaize | PostNL NV vs. Bpost NV | PostNL NV vs. Aegon NV | PostNL NV vs. Koninklijke KPN NV |
| Flow Traders vs. Aegon NV | Flow Traders vs. ABN Amro Group | Flow Traders vs. Koninklijke Philips NV | Flow Traders vs. Unilever PLC |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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