Correlation Between Amsterdam Commodities and OCI NV
Can any of the company-specific risk be diversified away by investing in both Amsterdam Commodities and OCI NV 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 OCI NV 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 OCI NV, you can compare the effects of market volatilities on Amsterdam Commodities and OCI NV 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 OCI NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amsterdam Commodities and OCI NV.
Diversification Opportunities for Amsterdam Commodities and OCI NV
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Amsterdam and OCI is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Amsterdam Commodities NV and OCI NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCI 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 OCI NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCI NV has no effect on the direction of Amsterdam Commodities i.e., Amsterdam Commodities and OCI NV go up and down completely randomly.
Pair Corralation between Amsterdam Commodities and OCI NV
Assuming the 90 days trading horizon Amsterdam Commodities NV is expected to generate 0.69 times more return on investment than OCI NV. However, Amsterdam Commodities NV is 1.44 times less risky than OCI NV. It trades about 0.03 of its potential returns per unit of risk. OCI NV is currently generating about -0.04 per unit of risk. If you would invest 1,718 in Amsterdam Commodities NV on September 12, 2024 and sell it today you would earn a total of 32.00 from holding Amsterdam Commodities NV or generate 1.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Amsterdam Commodities NV vs. OCI NV
Performance |
Timeline |
Amsterdam Commodities |
OCI NV |
Amsterdam Commodities and OCI NV Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amsterdam Commodities and OCI NV
The main advantage of trading using opposite Amsterdam Commodities and OCI NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amsterdam Commodities position performs unexpectedly, OCI NV 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 OCI NV will offset losses from the drop in OCI NV's long position.Amsterdam Commodities vs. Flow Traders BV | Amsterdam Commodities vs. Aalberts Industries NV | Amsterdam Commodities vs. ForFarmers NV | Amsterdam Commodities vs. TKH Group NV |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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