Correlation Between Reinet Investments and AEX Amsterdam
Can any of the company-specific risk be diversified away by investing in both Reinet Investments and AEX Amsterdam 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 Reinet Investments and AEX Amsterdam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reinet Investments SCA and AEX Amsterdam Index, you can compare the effects of market volatilities on Reinet Investments and AEX Amsterdam 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 Reinet Investments with a short position of AEX Amsterdam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinet Investments and AEX Amsterdam.
Diversification Opportunities for Reinet Investments and AEX Amsterdam
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Reinet and AEX is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Reinet Investments SCA and AEX Amsterdam Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEX Amsterdam Index and Reinet Investments 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 Reinet Investments SCA are associated (or correlated) with AEX Amsterdam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEX Amsterdam Index has no effect on the direction of Reinet Investments i.e., Reinet Investments and AEX Amsterdam go up and down completely randomly.
Pair Corralation between Reinet Investments and AEX Amsterdam
Assuming the 90 days trading horizon Reinet Investments SCA is expected to generate 3.82 times more return on investment than AEX Amsterdam. However, Reinet Investments is 3.82 times more volatile than AEX Amsterdam Index. It trades about 0.04 of its potential returns per unit of risk. AEX Amsterdam Index is currently generating about 0.05 per unit of risk. If you would invest 1,689 in Reinet Investments SCA on September 3, 2024 and sell it today you would earn a total of 791.00 from holding Reinet Investments SCA or generate 46.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.87% |
| Values | Daily Returns |
Reinet Investments SCA vs. AEX Amsterdam Index
Performance |
| Timeline |
Reinet Investments and AEX Amsterdam Volatility Contrast
Predicted Return Density |
| Returns |
Reinet Investments SCA
Pair trading matchups for Reinet Investments
AEX Amsterdam Index
Pair trading matchups for AEX Amsterdam
Pair Trading with Reinet Investments and AEX Amsterdam
The main advantage of trading using opposite Reinet Investments and AEX Amsterdam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinet Investments position performs unexpectedly, AEX Amsterdam 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 AEX Amsterdam will offset losses from the drop in AEX Amsterdam's long position.| Reinet Investments vs. Companhia Paranaense de | Reinet Investments vs. Quest For Growth | Reinet Investments vs. Hydratec Industries NV | Reinet Investments vs. iShares Property Yield |
| AEX Amsterdam vs. SBM Offshore NV | AEX Amsterdam vs. AMG Advanced Metallurgical | AEX Amsterdam vs. BE Semiconductor Industries | AEX Amsterdam vs. Sligro Food Group |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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