Correlation Between Flow Traders and Allfunds

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

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

Diversification Opportunities for Flow Traders and Allfunds

-0.06

Correlation Coefficient

Flow Traders  Allfunds

Good diversification

The 3 months correlation between Flow and Allfunds is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders BV and Allfunds Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allfunds Group and Flow Traders 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 Flow Traders BV are associated (or correlated) with Allfunds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allfunds Group has no effect on the direction of Flow Traders i.e., Flow Traders and Allfunds go up and down completely randomly.

Pair Corralation between Flow Traders and Allfunds

Assuming the 90 days trading horizon Flow Traders BV is expected to under-perform the Allfunds. In addition to that, Flow Traders is 2.23 times more volatile than Allfunds Group. It trades about -0.02 of its total potential returns per unit of risk. Allfunds Group is currently generating about 0.49 per unit of volatility. 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Flow Traders BV  vs.  Allfunds Group

Flow Traders BV

Risk-Adjusted Performance

Very Weak

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

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.

Pair Trading with Flow Traders and Allfunds

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

The idea behind Flow Traders BV and Allfunds 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.