Correlation Between Eguana Technologies and Alfen NV

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

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

Diversification Opportunities for Eguana Technologies and Alfen NV

0.0

Correlation Coefficient

Eguana Technologies  Alfen NV

Pay attention - limited upside

The 3 months correlation between Eguana and Alfen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eguana Technologies and Alfen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfen NV and Eguana Technologies 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 Eguana Technologies are associated (or correlated) with Alfen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfen NV has no effect on the direction of Eguana Technologies i.e., Eguana Technologies and Alfen NV go up and down completely randomly.

Pair Corralation between Eguana Technologies and Alfen NV

If you would invest  1.00  in Eguana Technologies on December 29, 2024 and sell it today you would lose (0.15) from holding Eguana Technologies or give up 15.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Eguana Technologies  vs.  Alfen NV

Eguana Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eguana Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Eguana Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Alfen NV

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Eguana Technologies and Alfen NV

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

The idea behind Eguana Technologies and Alfen NV 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.