Correlation Between Vastned Retail and AFC Ajax

Can any of the company-specific risk be diversified away by investing in both Vastned Retail and AFC Ajax 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 Vastned Retail and AFC Ajax into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Vastned Retail and AFC Ajax

-0.17

Correlation Coefficient

Vastned Retail  AFC Ajax

Good diversification

The 3 months correlation between Vastned and AFC is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and AFC Ajax NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Ajax NV and Vastned Retail 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 Vastned Retail NV are associated (or correlated) with AFC Ajax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Ajax NV has no effect on the direction of Vastned Retail i.e., Vastned Retail and AFC Ajax go up and down completely randomly.

Pair Corralation between Vastned Retail and AFC Ajax

Assuming the 90 days trading horizon Vastned Retail NV is expected to under-perform the AFC Ajax. In addition to that, Vastned Retail is 1.14 times more volatile than AFC Ajax NV. It trades about -0.11 of its total potential returns per unit of risk. AFC Ajax NV is currently generating about -0.01 per unit of volatility. If you would invest  1,010  in AFC Ajax NV on September 16, 2024 and sell it today you would lose (10.00) from holding AFC Ajax NV or give up 0.99% of portfolio value over 90 days.

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

Vastned Retail NV  vs.  AFC Ajax NV

Vastned Retail NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vastned Retail NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

AFC Ajax NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AFC Ajax NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AFC Ajax is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vastned Retail and AFC Ajax

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

The idea behind Vastned Retail NV and AFC Ajax 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.