Correlation Between Allfunds and ABN Amro

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

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

Diversification Opportunities for Allfunds and ABN Amro

0.85

Correlation Coefficient

Allfunds  ABN Amro

Very poor diversification

The 3 months correlation between Allfunds and ABN is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Allfunds Group and ABN Amro Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABN Amro Group and Allfunds 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 Allfunds Group are associated (or correlated) with ABN Amro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABN Amro Group has no effect on the direction of Allfunds i.e., Allfunds and ABN Amro go up and down completely randomly.

Pair Corralation between Allfunds and ABN Amro

Assuming the 90 days trading horizon Allfunds Group is expected to generate 1.02 times more return on investment than ABN Amro. However, Allfunds is 1.02 times more volatile than ABN Amro Group. It trades about 0.48 of its potential returns per unit of risk. ABN Amro Group is currently generating about 0.37 per unit of risk. If you would invest  476.00  in Allfunds Group on April 20, 2025 and sell it today you would earn a total of  274.00  from holding Allfunds Group or generate 57.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Allfunds Group  vs.  ABN Amro Group

Allfunds Group

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Allfunds Group are ranked lower than 38 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Allfunds sustained solid returns over the last few months and may actually be approaching a breakup point.

ABN Amro Group

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in ABN Amro Group are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ABN Amro unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allfunds and ABN Amro

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

The idea behind Allfunds Group and ABN Amro Group 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.