Correlation Between IMCD NV and Aalberts Industries

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

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

Diversification Opportunities for IMCD NV and Aalberts Industries

-0.05

Correlation Coefficient

IMCD NV  Aalberts Industries

Good diversification

The 3 months correlation between IMCD and Aalberts is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding IMCD NV and Aalberts Industries NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aalberts Industries and IMCD NV 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 IMCD NV are associated (or correlated) with Aalberts Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aalberts Industries has no effect on the direction of IMCD NV i.e., IMCD NV and Aalberts Industries go up and down completely randomly.

Pair Corralation between IMCD NV and Aalberts Industries

Assuming the 90 days trading horizon IMCD NV is expected to under-perform the Aalberts Industries. In addition to that, IMCD NV is 1.18 times more volatile than Aalberts Industries NV. It trades about -0.03 of its total potential returns per unit of risk. Aalberts Industries NV is currently generating about 0.17 per unit of volatility. If you would invest  2,664  in Aalberts Industries NV on April 21, 2025 and sell it today you would earn a total of  518.00  from holding Aalberts Industries NV or generate 19.44% return on investment over 90 days.

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

IMCD NV  vs.  Aalberts Industries NV

IMCD NV

Risk-Adjusted Performance

Very Weak

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

Aalberts Industries

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aalberts Industries NV are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aalberts Industries unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IMCD NV and Aalberts Industries

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

The idea behind IMCD NV and Aalberts Industries 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.