Correlation Between Value8 NV and Allfunds

Can any of the company-specific risk be diversified away by investing in both Value8 NV 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 Value8 NV and Allfunds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Value8 NV and Allfunds Group, you can compare the effects of market volatilities on Value8 NV 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 Value8 NV with a short position of Allfunds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value8 NV and Allfunds.

Diversification Opportunities for Value8 NV and Allfunds

0.76

Correlation Coefficient

Value8 NV  Allfunds

Poor diversification

The 3 months correlation between Value8 and Allfunds is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Value8 NV and Allfunds Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allfunds Group and Value8 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 Value8 NV 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 Value8 NV i.e., Value8 NV and Allfunds go up and down completely randomly.

Pair Corralation between Value8 NV and Allfunds

Assuming the 90 days trading horizon Value8 NV is expected to generate 3.17 times less return on investment than Allfunds. In addition to that, Value8 NV is 1.31 times more volatile than Allfunds Group. It trades about 0.12 of its total potential returns per unit of risk. Allfunds Group is currently generating about 0.48 per unit of volatility. If you would invest  476.00  in Allfunds Group on April 22, 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 Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Value8 NV  vs.  Allfunds Group

Value8 NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Value8 NV are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Value8 NV sustained solid returns over the last few months and may actually be approaching a breakup point.

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 Value8 NV and Allfunds

The main advantage of trading using opposite Value8 NV and Allfunds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value8 NV 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 Value8 NV 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 Transaction History module to view history of all your transactions and understand their impact on performance.