Correlation Between Reinet Investments and AFC Ajax
Can any of the company-specific risk be diversified away by investing in both Reinet Investments and AFC Ajax 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 AFC Ajax 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 AFC Ajax NV, you can compare the effects of market volatilities on Reinet Investments and AFC Ajax 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 AFC Ajax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinet Investments and AFC Ajax.
Diversification Opportunities for Reinet Investments and AFC Ajax
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Reinet and AFC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Reinet Investments SCA and AFC Ajax NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Ajax NV 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 AFC Ajax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Ajax NV has no effect on the direction of Reinet Investments i.e., Reinet Investments and AFC Ajax go up and down completely randomly.
Pair Corralation between Reinet Investments and AFC Ajax
Assuming the 90 days trading horizon Reinet Investments SCA is expected to generate 2.57 times more return on investment than AFC Ajax. However, Reinet Investments is 2.57 times more volatile than AFC Ajax NV. It trades about 0.03 of its potential returns per unit of risk. AFC Ajax NV is currently generating about -0.02 per unit of risk. If you would invest 2,020 in Reinet Investments SCA on September 2, 2024 and sell it today you would earn a total of 460.00 from holding Reinet Investments SCA or generate 22.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.95% |
| Values | Daily Returns |
Reinet Investments SCA vs. AFC Ajax NV
Performance |
| Timeline |
| Reinet Investments SCA |
| AFC Ajax NV |
Reinet Investments and AFC Ajax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinet Investments and AFC Ajax
The main advantage of trading using opposite Reinet Investments and AFC Ajax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinet Investments position performs unexpectedly, AFC Ajax 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 AFC Ajax will offset losses from the drop in AFC Ajax's long position.| Reinet Investments vs. Pershing Square Holdings | Reinet Investments vs. Universal Music Group | Reinet Investments vs. Hydratec Industries NV | Reinet Investments vs. BlackRock ESG Multi Asset |
| AFC Ajax vs. Tetragon Financial Group | AFC Ajax vs. Vastned Retail NV | AFC Ajax vs. Reinet Investments SCA | AFC Ajax vs. Accsys Technologies |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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