Correlation Between Amsterdam Commodities and Kendrion

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

By analyzing existing cross correlation between Amsterdam Commodities NV and Kendrion NV, you can compare the effects of market volatilities on Amsterdam Commodities and Kendrion 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 Amsterdam Commodities with a short position of Kendrion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amsterdam Commodities and Kendrion.

Diversification Opportunities for Amsterdam Commodities and Kendrion

0.25

Correlation Coefficient

Amsterdam Commodities  Kendrion

Modest diversification

The 3 months correlation between Amsterdam and Kendrion is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Amsterdam Commodities NV and Kendrion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kendrion NV and Amsterdam Commodities 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 Amsterdam Commodities NV are associated (or correlated) with Kendrion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kendrion NV has no effect on the direction of Amsterdam Commodities i.e., Amsterdam Commodities and Kendrion go up and down completely randomly.

Pair Corralation between Amsterdam Commodities and Kendrion

Assuming the 90 days trading horizon Amsterdam Commodities NV is expected to generate 0.64 times more return on investment than Kendrion. However, Amsterdam Commodities NV is 1.57 times less risky than Kendrion. It trades about -0.01 of its potential returns per unit of risk. Kendrion NV is currently generating about -0.14 per unit of risk. If you would invest  1,742  in Amsterdam Commodities NV on September 20, 2024 and sell it today you would lose (16.00) from holding Amsterdam Commodities NV or give up 0.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Amsterdam Commodities NV  vs.  Kendrion NV

Amsterdam Commodities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amsterdam Commodities NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Amsterdam Commodities is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Kendrion NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kendrion NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Amsterdam Commodities and Kendrion

The main advantage of trading using opposite Amsterdam Commodities and Kendrion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amsterdam Commodities position performs unexpectedly, Kendrion 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 Kendrion will offset losses from the drop in Kendrion's long position.

The idea behind Amsterdam Commodities NV and Kendrion NV 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.