Correlation Between Aalberts Industries and Alumexx NV

Can any of the company-specific risk be diversified away by investing in both Aalberts Industries and Alumexx 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 Aalberts Industries and Alumexx NV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aalberts Industries NV and Alumexx NV, you can compare the effects of market volatilities on Aalberts Industries and Alumexx 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 Aalberts Industries with a short position of Alumexx NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aalberts Industries and Alumexx NV.

Diversification Opportunities for Aalberts Industries and Alumexx NV

0.1

Correlation Coefficient

Aalberts Industries  Alumexx NV

Average diversification

The 3 months correlation between Aalberts and Alumexx is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Aalberts Industries NV and Alumexx NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumexx NV and Aalberts Industries 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 Aalberts Industries NV are associated (or correlated) with Alumexx NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumexx NV has no effect on the direction of Aalberts Industries i.e., Aalberts Industries and Alumexx NV go up and down completely randomly.

Pair Corralation between Aalberts Industries and Alumexx NV

Assuming the 90 days trading horizon Aalberts Industries NV is expected to under-perform the Alumexx NV. In addition to that, Aalberts Industries is 1.32 times more volatile than Alumexx NV. It trades about -0.02 of its total potential returns per unit of risk. Alumexx NV is currently generating about 0.08 per unit of volatility. If you would invest  126.00  in Alumexx NV on December 30, 2024 and sell it today you would earn a total of  12.00  from holding Alumexx NV or generate 9.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aalberts Industries NV  vs.  Alumexx NV

Aalberts Industries

Risk-Adjusted Performance

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Alumexx NV

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alumexx NV are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Alumexx NV may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aalberts Industries and Alumexx NV

The main advantage of trading using opposite Aalberts Industries and Alumexx NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aalberts Industries position performs unexpectedly, Alumexx 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 Alumexx NV will offset losses from the drop in Alumexx NV's long position.

The idea behind Aalberts Industries NV and Alumexx 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..