Correlation Between Corbion NV and Alfen Beheer

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Can any of the company-specific risk be diversified away by investing in both Corbion NV and Alfen Beheer 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 Corbion NV and Alfen Beheer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corbion NV and Alfen Beheer BV, you can compare the effects of market volatilities on Corbion NV and Alfen Beheer 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 Corbion NV with a short position of Alfen Beheer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corbion NV and Alfen Beheer.

Diversification Opportunities for Corbion NV and Alfen Beheer

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Corbion and Alfen is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Corbion NV and Alfen Beheer BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfen Beheer BV and Corbion NV 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 Corbion NV are associated (or correlated) with Alfen Beheer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfen Beheer BV has no effect on the direction of Corbion NV i.e., Corbion NV and Alfen Beheer go up and down completely randomly.

Pair Corralation between Corbion NV and Alfen Beheer

Assuming the 90 days trading horizon Corbion NV is expected to generate 0.46 times more return on investment than Alfen Beheer. However, Corbion NV is 2.2 times less risky than Alfen Beheer. It trades about 0.0 of its potential returns per unit of risk. Alfen Beheer BV is currently generating about -0.04 per unit of risk. If you would invest  2,176  in Corbion NV on September 18, 2024 and sell it today you would lose (4.00) from holding Corbion NV or give up 0.18% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Corbion NV  vs.  Alfen Beheer BV

 Performance 
       Timeline  
Corbion NV 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Corbion NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
Alfen Beheer BV 

Risk-Adjusted Performance

0 of 100

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

Corbion NV and Alfen Beheer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Corbion NV and Alfen Beheer

The main advantage of trading using opposite Corbion NV and Alfen Beheer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corbion NV position performs unexpectedly, Alfen Beheer 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 Alfen Beheer will offset losses from the drop in Alfen Beheer's long position.
The idea behind Corbion NV and Alfen Beheer BV 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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