Correlation Between REVO INSURANCE and ABN AMRO

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

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

Diversification Opportunities for REVO INSURANCE and ABN AMRO

0.68

Correlation Coefficient

REVO INSURANCE  ABN AMRO

Poor diversification

The 3 months correlation between REVO and ABN is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA and ABN AMRO Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABN AMRO Bank and REVO INSURANCE 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 REVO INSURANCE SPA 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 Bank has no effect on the direction of REVO INSURANCE i.e., REVO INSURANCE and ABN AMRO go up and down completely randomly.

Pair Corralation between REVO INSURANCE and ABN AMRO

Assuming the 90 days horizon REVO INSURANCE is expected to generate 1.8 times less return on investment than ABN AMRO. In addition to that, REVO INSURANCE is 2.03 times more volatile than ABN AMRO Bank. It trades about 0.1 of its total potential returns per unit of risk. ABN AMRO Bank is currently generating about 0.36 per unit of volatility. If you would invest  1,728  in ABN AMRO Bank on April 20, 2025 and sell it today you would earn a total of  684.00  from holding ABN AMRO Bank or generate 39.58% return on investment over 90 days.

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

REVO INSURANCE SPA  vs.  ABN AMRO Bank

REVO INSURANCE SPA

Risk-Adjusted Performance

OK

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

ABN AMRO Bank

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in ABN AMRO Bank are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, ABN AMRO unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with REVO INSURANCE and ABN AMRO

The main advantage of trading using opposite REVO INSURANCE and ABN AMRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE 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 REVO INSURANCE SPA and ABN AMRO Bank 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.