Correlation Between AMG Advanced and Alfen Beheer

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Can any of the company-specific risk be diversified away by investing in both AMG Advanced 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 AMG Advanced and Alfen Beheer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and Alfen Beheer BV, you can compare the effects of market volatilities on AMG Advanced 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 AMG Advanced with a short position of Alfen Beheer. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Alfen Beheer.

Diversification Opportunities for AMG Advanced and Alfen Beheer

-0.52
  Correlation Coefficient

Excellent diversification

The 3 months correlation between AMG and Alfen is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical 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 AMG Advanced 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 AMG Advanced Metallurgical 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 AMG Advanced i.e., AMG Advanced and Alfen Beheer go up and down completely randomly.

Pair Corralation between AMG Advanced and Alfen Beheer

Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to generate 0.74 times more return on investment than Alfen Beheer. However, AMG Advanced Metallurgical is 1.36 times less risky than Alfen Beheer. It trades about 0.29 of its potential returns per unit of risk. Alfen Beheer BV is currently generating about -0.07 per unit of risk. If you would invest  1,543  in AMG Advanced Metallurgical on April 24, 2025 and sell it today you would earn a total of  1,123  from holding AMG Advanced Metallurgical or generate 72.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

AMG Advanced Metallurgical  vs.  Alfen Beheer BV

 Performance 
       Timeline  
AMG Advanced Metallu 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in AMG Advanced Metallurgical are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, AMG Advanced unveiled solid returns over the last few months and may actually be approaching a breakup point.
Alfen Beheer BV 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Alfen Beheer BV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

AMG Advanced and Alfen Beheer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AMG Advanced and Alfen Beheer

The main advantage of trading using opposite AMG Advanced and Alfen Beheer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced 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 AMG Advanced Metallurgical 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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