Correlation Between Adyen NV and KERINGUNSPADR 1/10

Can any of the company-specific risk be diversified away by investing in both Adyen NV and KERINGUNSPADR 1/10 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 KERINGUNSPADR 1/10 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Adyen NV and KERINGUNSPADR 110 EO, you can compare the effects of market volatilities on Adyen NV and KERINGUNSPADR 1/10 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 KERINGUNSPADR 1/10. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adyen NV and KERINGUNSPADR 1/10.

Diversification Opportunities for Adyen NV and KERINGUNSPADR 1/10

0.37

Correlation Coefficient

Adyen NV  KERINGUNSPADR 1/10

Weak diversification

The 3 months correlation between Adyen and KERINGUNSPADR is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Adyen NV and KERINGUNSPADR 110 EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KERINGUNSPADR 1/10 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 KERINGUNSPADR 1/10. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KERINGUNSPADR 1/10 has no effect on the direction of Adyen NV i.e., Adyen NV and KERINGUNSPADR 1/10 go up and down completely randomly.

Pair Corralation between Adyen NV and KERINGUNSPADR 1/10

Assuming the 90 days horizon Adyen NV is expected to under-perform the KERINGUNSPADR 1/10. But the pink sheet apears to be less risky and, when comparing its historical volatility, Adyen NV is 1.59 times less risky than KERINGUNSPADR 1/10. The pink sheet trades about -0.1 of its potential returns per unit of risk. The KERINGUNSPADR 110 EO is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,200  in KERINGUNSPADR 110 EO on October 5, 2024 and sell it today you would earn a total of  140.00  from holding KERINGUNSPADR 110 EO or generate 6.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.0%
Values	Daily Returns

Adyen NV  vs.  KERINGUNSPADR 110 EO

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.

KERINGUNSPADR 1/10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KERINGUNSPADR 110 EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, KERINGUNSPADR 1/10 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Adyen NV and KERINGUNSPADR 1/10

The main advantage of trading using opposite Adyen NV and KERINGUNSPADR 1/10 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adyen NV position performs unexpectedly, KERINGUNSPADR 1/10 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 KERINGUNSPADR 1/10 will offset losses from the drop in KERINGUNSPADR 1/10's long position.

The idea behind Adyen NV and KERINGUNSPADR 110 EO 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.