Correlation Between Adyen NV and Cell Source

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Can any of the company-specific risk be diversified away by investing in both Adyen NV and Cell Source 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 Cell Source into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adyen NV and Cell Source, you can compare the effects of market volatilities on Adyen NV and Cell Source 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 Cell Source. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adyen NV and Cell Source.

Diversification Opportunities for Adyen NV and Cell Source

-0.11
  Correlation Coefficient

Good diversification

The 3 months correlation between Adyen and Cell is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Adyen NV and Cell Source in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cell Source 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 Cell Source. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cell Source has no effect on the direction of Adyen NV i.e., Adyen NV and Cell Source go up and down completely randomly.

Pair Corralation between Adyen NV and Cell Source

Assuming the 90 days horizon Adyen NV is expected to generate 0.12 times more return on investment than Cell Source. However, Adyen NV is 8.05 times less risky than Cell Source. It trades about -0.1 of its potential returns per unit of risk. Cell Source is currently generating about -0.22 per unit of risk. If you would invest  1,508  in Adyen NV on October 5, 2024 and sell it today you would lose (42.00) from holding Adyen NV or give up 2.79% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Adyen NV  vs.  Cell Source

 Performance 
       Timeline  
Adyen NV 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Cell Source 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Cell Source are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Cell Source unveiled solid returns over the last few months and may actually be approaching a breakup point.

Adyen NV and Cell Source Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Adyen NV and Cell Source

The main advantage of trading using opposite Adyen NV and Cell Source positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adyen NV position performs unexpectedly, Cell Source 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 Cell Source will offset losses from the drop in Cell Source's long position.
The idea behind Adyen NV and Cell Source 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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