Correlation Between Adyen NV and CH Robinson

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

By analyzing existing cross correlation between Adyen NV and CH Robinson Worldwide, you can compare the effects of market volatilities on Adyen NV and CH Robinson 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 CH Robinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adyen NV and CH Robinson.

Diversification Opportunities for Adyen NV and CH Robinson

-0.18

Correlation Coefficient

Adyen NV  CH Robinson

Good diversification

The 3 months correlation between Adyen and CH1A is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Adyen NV and CH Robinson Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH Robinson Worldwide 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 CH Robinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH Robinson Worldwide has no effect on the direction of Adyen NV i.e., Adyen NV and CH Robinson go up and down completely randomly.

Pair Corralation between Adyen NV and CH Robinson

Assuming the 90 days horizon Adyen NV is expected to generate 1.04 times less return on investment than CH Robinson. In addition to that, Adyen NV is 1.15 times more volatile than CH Robinson Worldwide. It trades about 0.08 of its total potential returns per unit of risk. CH Robinson Worldwide is currently generating about 0.09 per unit of volatility. If you would invest  7,997  in CH Robinson Worldwide on October 20, 2024 and sell it today you would earn a total of  1,903  from holding CH Robinson Worldwide or generate 23.8% return on investment over 90 days.

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

Adyen NV  vs.  CH Robinson Worldwide

Adyen NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adyen NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Adyen NV is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

CH Robinson Worldwide

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CH Robinson Worldwide has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CH Robinson is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Adyen NV and CH Robinson

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

The idea behind Adyen NV and CH Robinson Worldwide 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.