Correlation Between Avantium Holding and Alfen Beheer

Can any of the company-specific risk be diversified away by investing in both Avantium Holding and Alfen Beheer 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 Avantium Holding and Alfen Beheer into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Avantium Holding BV and Alfen Beheer BV, you can compare the effects of market volatilities on Avantium Holding and Alfen Beheer 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 Avantium Holding with a short position of Alfen Beheer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantium Holding and Alfen Beheer.

Diversification Opportunities for Avantium Holding and Alfen Beheer

-0.39

Correlation Coefficient

Avantium Holding  Alfen Beheer

Very good diversification

The 3 months correlation between Avantium and Alfen is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Avantium Holding BV and Alfen Beheer BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfen Beheer BV and Avantium Holding 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 Avantium Holding BV are associated (or correlated) with Alfen Beheer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfen Beheer BV has no effect on the direction of Avantium Holding i.e., Avantium Holding and Alfen Beheer go up and down completely randomly.

Pair Corralation between Avantium Holding and Alfen Beheer

Assuming the 90 days trading horizon Avantium Holding BV is expected to under-perform the Alfen Beheer. But the stock apears to be less risky and, when comparing its historical volatility, Avantium Holding BV is 1.67 times less risky than Alfen Beheer. The stock trades about -0.1 of its potential returns per unit of risk. The Alfen Beheer BV is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,139  in Alfen Beheer BV on December 23, 2024 and sell it today you would earn a total of  247.00  from holding Alfen Beheer BV or generate 21.69% return on investment over 90 days.

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

Avantium Holding BV  vs.  Alfen Beheer BV

Avantium Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Avantium Holding BV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Alfen Beheer BV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alfen Beheer BV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Alfen Beheer sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Avantium Holding and Alfen Beheer

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

The idea behind Avantium Holding BV and Alfen Beheer BV 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 Valuation module to check real value of public entities based on technical and fundamental data.