Correlation Between Ackermans Van and Umicore SA

Can any of the company-specific risk be diversified away by investing in both Ackermans Van and Umicore SA 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 Ackermans Van and Umicore SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ackermans Van Haaren and Umicore SA, you can compare the effects of market volatilities on Ackermans Van and Umicore SA 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 Ackermans Van with a short position of Umicore SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ackermans Van and Umicore SA.

Diversification Opportunities for Ackermans Van and Umicore SA

-0.15

Correlation Coefficient

Ackermans Van  Umicore SA

Good diversification

The 3 months correlation between Ackermans and Umicore is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ackermans Van Haaren and Umicore SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Umicore SA and Ackermans Van 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 Ackermans Van Haaren are associated (or correlated) with Umicore SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Umicore SA has no effect on the direction of Ackermans Van i.e., Ackermans Van and Umicore SA go up and down completely randomly.

Pair Corralation between Ackermans Van and Umicore SA

Assuming the 90 days trading horizon Ackermans Van Haaren is expected to generate 0.54 times more return on investment than Umicore SA. However, Ackermans Van Haaren is 1.84 times less risky than Umicore SA. It trades about 0.21 of its potential returns per unit of risk. Umicore SA is currently generating about 0.05 per unit of risk. If you would invest  18,710  in Ackermans Van Haaren on October 22, 2024 and sell it today you would earn a total of  610.00  from holding Ackermans Van Haaren or generate 3.26% return on investment over 90 days.

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

Ackermans Van Haaren  vs.  Umicore SA

Ackermans Van Haaren

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ackermans Van Haaren are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Ackermans Van is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Umicore SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Umicore SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Umicore SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ackermans Van and Umicore SA

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

The idea behind Ackermans Van Haaren and Umicore SA 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..