Correlation Between Adyen NV and Colonial Coal
Can any of the company-specific risk be diversified away by investing in both Adyen NV and Colonial Coal 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 Colonial Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adyen NV and Colonial Coal International, you can compare the effects of market volatilities on Adyen NV and Colonial Coal 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 Colonial Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adyen NV and Colonial Coal.
Diversification Opportunities for Adyen NV and Colonial Coal
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Adyen and Colonial is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Adyen NV and Colonial Coal International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colonial Coal Intern 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 Colonial Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colonial Coal Intern has no effect on the direction of Adyen NV i.e., Adyen NV and Colonial Coal go up and down completely randomly.
Pair Corralation between Adyen NV and Colonial Coal
Assuming the 90 days horizon Adyen NV is expected to generate 0.55 times more return on investment than Colonial Coal. However, Adyen NV is 1.8 times less risky than Colonial Coal. It trades about 0.0 of its potential returns per unit of risk. Colonial Coal International is currently generating about -0.1 per unit of risk. If you would invest 1,482 in Adyen NV on October 4, 2024 and sell it today you would lose (16.00) from holding Adyen NV or give up 1.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.39% |
Values | Daily Returns |
Adyen NV vs. Colonial Coal International
Performance |
Timeline |
Adyen NV |
Colonial Coal Intern |
Adyen NV and Colonial Coal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Adyen NV and Colonial Coal
The main advantage of trading using opposite Adyen NV and Colonial Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adyen NV position performs unexpectedly, Colonial Coal 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 Colonial Coal will offset losses from the drop in Colonial Coal's long position.Adyen NV vs. Confluent | Adyen NV vs. Kinsale Capital Group | Adyen NV vs. DigitalOcean Holdings | Adyen NV vs. Walker Dunlop |
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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 Stocks Directory module to find actively traded stocks across global markets.
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