Correlation Between Adyen NV and Amg Renaissance
Can any of the company-specific risk be diversified away by investing in both Adyen NV and Amg Renaissance 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 Amg Renaissance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adyen NV and Amg Renaissance Large, you can compare the effects of market volatilities on Adyen NV and Amg Renaissance 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 Amg Renaissance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adyen NV and Amg Renaissance.
Diversification Opportunities for Adyen NV and Amg Renaissance
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adyen and Amg is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Adyen NV and Amg Renaissance Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Renaissance Large 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 Amg Renaissance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Renaissance Large has no effect on the direction of Adyen NV i.e., Adyen NV and Amg Renaissance go up and down completely randomly.
Pair Corralation between Adyen NV and Amg Renaissance
Assuming the 90 days horizon Adyen NV is expected to generate 1.14 times less return on investment than Amg Renaissance. In addition to that, Adyen NV is 3.19 times more volatile than Amg Renaissance Large. It trades about 0.02 of its total potential returns per unit of risk. Amg Renaissance Large is currently generating about 0.06 per unit of volatility. If you would invest 1,332 in Amg Renaissance Large on October 5, 2024 and sell it today you would earn a total of 446.00 from holding Amg Renaissance Large or generate 33.48% 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. Amg Renaissance Large
Performance |
Timeline |
Adyen NV |
Amg Renaissance Large |
Adyen NV and Amg Renaissance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Adyen NV and Amg Renaissance
The main advantage of trading using opposite Adyen NV and Amg Renaissance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adyen NV position performs unexpectedly, Amg Renaissance 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 Amg Renaissance will offset losses from the drop in Amg Renaissance'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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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