Correlation Between Holland Colours and Iex Group

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

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

Diversification Opportunities for Holland Colours and Iex Group

-0.3

Correlation Coefficient

Holland Colours  Iex Group

Very good diversification

The 3 months correlation between Holland and Iex is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Holland Colours NV and Iex Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iex Group NV and Holland Colours 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 Holland Colours NV are associated (or correlated) with Iex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iex Group NV has no effect on the direction of Holland Colours i.e., Holland Colours and Iex Group go up and down completely randomly.

Pair Corralation between Holland Colours and Iex Group

Assuming the 90 days trading horizon Holland Colours NV is expected to generate 0.97 times more return on investment than Iex Group. However, Holland Colours NV is 1.03 times less risky than Iex Group. It trades about 0.17 of its potential returns per unit of risk. Iex Group NV is currently generating about 0.08 per unit of risk. If you would invest  8,370  in Holland Colours NV on April 25, 2025 and sell it today you would earn a total of  1,930  from holding Holland Colours NV or generate 23.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	60.32%
Values	Daily Returns

Holland Colours NV  vs.  Iex Group NV

Holland Colours NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Holland Colours NV are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Holland Colours sustained solid returns over the last few months and may actually be approaching a breakup point.

Iex Group NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Iex Group NV are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Iex Group may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Holland Colours and Iex Group

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

The idea behind Holland Colours NV and Iex Group 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.