Correlation Between SBF 120 and Flow Traders

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Can any of the company-specific risk be diversified away by investing in both SBF 120 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 SBF 120 and Flow Traders into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SBF 120 Gross and Flow Traders BV, you can compare the effects of market volatilities on SBF 120 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 SBF 120 with a short position of Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBF 120 and Flow Traders.

Diversification Opportunities for SBF 120 and Flow Traders

-0.36

Correlation Coefficient

SBF 120

Flow Traders

Very good diversification

The 3 months correlation between SBF and Flow is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding SBF 120 Gross 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 SBF 120 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 SBF 120 Gross 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 SBF 120 i.e., SBF 120 and Flow Traders go up and down completely randomly.

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Pair Corralation between SBF 120 and Flow Traders

Assuming the 90 days trading horizon SBF 120 Gross is expected to generate 0.45 times more return on investment than Flow Traders. However, SBF 120 Gross is 2.21 times less risky than Flow Traders. It trades about 0.03 of its potential returns per unit of risk. Flow Traders BV is currently generating about 0.01 per unit of risk. If you would invest 1,350,691 in SBF 120 Gross on September 3, 2024 and sell it today you would earn a total of 171,965 from holding SBF 120 Gross or generate 12.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SBF 120 Gross vs. Flow Traders BV

Performance

Timeline

SBF 120 and Flow Traders Volatility Contrast

Predicted Return Density

Returns

SBF 120 Gross

Pair trading matchups for SBF 120

	SBF 120 vs. Flow Traders BV
	SBF 120 vs. Vastned Retail NV
	SBF 120 vs. Sligro Food Group
	SBF 120 vs. SBM Offshore NV

Flow Traders BV

Pair trading matchups for Flow Traders

	Flow Traders vs. NN Group NV
	Flow Traders vs. BE Semiconductor Industries
	Flow Traders vs. Koninklijke Ahold Delhaize
	Flow Traders vs. ASR Nederland NV

Pair Trading with SBF 120 and Flow Traders

The main advantage of trading using opposite SBF 120 and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBF 120 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.

	SBF 120 vs. Flow Traders BV
	SBF 120 vs. Vastned Retail NV
	SBF 120 vs. Sligro Food Group
	SBF 120 vs. SBM Offshore NV

The idea behind SBF 120 Gross and Flow Traders BV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

	Flow Traders vs. NN Group NV
	Flow Traders vs. BE Semiconductor Industries
	Flow Traders vs. Koninklijke Ahold Delhaize
	Flow Traders vs. ASR Nederland NV

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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