Correlation Between TEAM Plc and Flow Traders
Can any of the company-specific risk be diversified away by investing in both TEAM Plc 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 TEAM Plc and Flow Traders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TEAM plc and Flow Traders NV, you can compare the effects of market volatilities on TEAM Plc 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 TEAM Plc with a short position of Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of TEAM Plc and Flow Traders.
Diversification Opportunities for TEAM Plc and Flow Traders
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TEAM and Flow is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding TEAM plc and Flow Traders NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Traders NV and TEAM Plc 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 TEAM plc 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 NV has no effect on the direction of TEAM Plc i.e., TEAM Plc and Flow Traders go up and down completely randomly.
Pair Corralation between TEAM Plc and Flow Traders
Assuming the 90 days trading horizon TEAM plc is expected to under-perform the Flow Traders. In addition to that, TEAM Plc is 1.25 times more volatile than Flow Traders NV. It trades about -0.12 of its total potential returns per unit of risk. Flow Traders NV is currently generating about 0.01 per unit of volatility. If you would invest 2,084 in Flow Traders NV on September 3, 2024 and sell it today you would earn a total of 28.00 from holding Flow Traders NV or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TEAM plc vs. Flow Traders NV
Performance |
| Timeline |
| TEAM plc |
| Flow Traders NV |
TEAM Plc and Flow Traders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TEAM Plc and Flow Traders
The main advantage of trading using opposite TEAM Plc and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TEAM Plc 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.| TEAM Plc vs. Flow Traders NV | TEAM Plc vs. Ebro Foods | TEAM Plc vs. Hilton Food Group | TEAM Plc vs. Axfood AB |
| Flow Traders vs. Check Point Software | Flow Traders vs. SMA Solar Technology | Flow Traders vs. Microchip Technology | Flow Traders vs. Uber 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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