Correlation Between Adyen NV and CrowdStrike Holdings
Can any of the company-specific risk be diversified away by investing in both Adyen NV and CrowdStrike Holdings 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 Adyen NV and CrowdStrike Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adyen NV and CrowdStrike Holdings, you can compare the effects of market volatilities on Adyen NV and CrowdStrike Holdings 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 Adyen NV with a short position of CrowdStrike Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adyen NV and CrowdStrike Holdings.
Diversification Opportunities for Adyen NV and CrowdStrike Holdings
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Adyen and CrowdStrike is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Adyen NV and CrowdStrike Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrowdStrike Holdings and Adyen 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 Adyen NV are associated (or correlated) with CrowdStrike Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrowdStrike Holdings has no effect on the direction of Adyen NV i.e., Adyen NV and CrowdStrike Holdings go up and down completely randomly.
Pair Corralation between Adyen NV and CrowdStrike Holdings
Assuming the 90 days horizon Adyen NV is expected to generate 0.88 times more return on investment than CrowdStrike Holdings. However, Adyen NV is 1.13 times less risky than CrowdStrike Holdings. It trades about 0.02 of its potential returns per unit of risk. CrowdStrike Holdings is currently generating about 0.0 per unit of risk. If you would invest 142,460 in Adyen NV on December 30, 2024 and sell it today you would earn a total of 2,680 from holding Adyen NV or generate 1.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Adyen NV vs. CrowdStrike Holdings
Performance |
Timeline |
Adyen NV |
CrowdStrike Holdings |
Adyen NV and CrowdStrike Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Adyen NV and CrowdStrike Holdings
The main advantage of trading using opposite Adyen NV and CrowdStrike Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adyen NV position performs unexpectedly, CrowdStrike Holdings 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 CrowdStrike Holdings will offset losses from the drop in CrowdStrike Holdings' long position.Adyen NV vs. Wayside Technology Group | Adyen NV vs. BE Semiconductor Industries | Adyen NV vs. Micron Technology | Adyen NV vs. Kingdee International Software |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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