Correlation Between Shell PLC and Aalberts Industries

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Shell PLC and Aalberts Industries 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 Shell PLC and Aalberts Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shell PLC and Aalberts Industries NV, you can compare the effects of market volatilities on Shell PLC and Aalberts Industries 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 Shell PLC with a short position of Aalberts Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shell PLC and Aalberts Industries.

Diversification Opportunities for Shell PLC and Aalberts Industries

ShellAalbertsDiversified AwayShellAalbertsDiversified Away100%
-0.14
  Correlation Coefficient

Good diversification

The 3 months correlation between Shell and Aalberts is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Shell PLC and Aalberts Industries NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aalberts Industries and Shell 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 Shell PLC are associated (or correlated) with Aalberts Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aalberts Industries has no effect on the direction of Shell PLC i.e., Shell PLC and Aalberts Industries go up and down completely randomly.

Pair Corralation between Shell PLC and Aalberts Industries

Assuming the 90 days trading horizon Shell PLC is expected to under-perform the Aalberts Industries. But the stock apears to be less risky and, when comparing its historical volatility, Shell PLC is 1.49 times less risky than Aalberts Industries. The stock trades about -0.06 of its potential returns per unit of risk. The Aalberts Industries NV is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  3,526  in Aalberts Industries NV on September 24, 2024 and sell it today you would lose (140.00) from holding Aalberts Industries NV or give up 3.97% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Shell PLC  vs.  Aalberts Industries NV

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -505
JavaScript chart by amCharts 3.21.15SHELL AALB
       Timeline  
Shell PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Shell PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shell PLC is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2929.53030.53131.5
Aalberts Industries 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aalberts Industries NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Aalberts Industries is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec333435363738

Shell PLC and Aalberts Industries Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.01-1.52-1.03-0.54-0.060.360.851.341.832.32 0.100.150.200.25
JavaScript chart by amCharts 3.21.15SHELL AALB
       Returns  

Pair Trading with Shell PLC and Aalberts Industries

The main advantage of trading using opposite Shell PLC and Aalberts Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shell PLC position performs unexpectedly, Aalberts Industries 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 Aalberts Industries will offset losses from the drop in Aalberts Industries' long position.
The idea behind Shell PLC and Aalberts Industries 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.
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

Other Complementary Tools

Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital