Correlation Between Corbion NV and Alfen Beheer
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Corbion NV vs. Alfen Beheer BV
Performance |
Timeline |
Corbion NV |
Alfen Beheer BV |
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.Corbion NV vs. Flow Traders BV | Corbion NV vs. Aalberts Industries NV | Corbion NV vs. ForFarmers NV | Corbion NV 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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