Correlation Between RENEWI and NV Nederlandsche

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

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

Diversification Opportunities for RENEWI and NV Nederlandsche

-0.69

Correlation Coefficient

RENEWI  NV Nederlandsche

Excellent diversification

The 3 months correlation between RENEWI and NEDAP is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding RENEWI and NV Nederlandsche Apparatenfabr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Nederlandsche App and RENEWI 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 RENEWI are associated (or correlated) with NV Nederlandsche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Nederlandsche App has no effect on the direction of RENEWI i.e., RENEWI and NV Nederlandsche go up and down completely randomly.

Pair Corralation between RENEWI and NV Nederlandsche

Assuming the 90 days trading horizon RENEWI is expected to under-perform the NV Nederlandsche. In addition to that, RENEWI is 6.94 times more volatile than NV Nederlandsche Apparatenfabriek. It trades about -0.12 of its total potential returns per unit of risk. NV Nederlandsche Apparatenfabriek is currently generating about 0.32 per unit of volatility. If you would invest  5,940  in NV Nederlandsche Apparatenfabriek on April 24, 2025 and sell it today you would earn a total of  2,700  from holding NV Nederlandsche Apparatenfabriek or generate 45.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

RENEWI  vs.  NV Nederlandsche Apparatenfabr

RENEWI

Risk-Adjusted Performance

Very Weak

Over the last 90 days RENEWI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

NV Nederlandsche App

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NV Nederlandsche Apparatenfabriek are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, NV Nederlandsche sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RENEWI and NV Nederlandsche

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

The idea behind RENEWI and NV Nederlandsche Apparatenfabriek 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.