Correlation Between Amsterdam Commodities and Shell PLC

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

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

Diversification Opportunities for Amsterdam Commodities and Shell PLC

-0.24

Correlation Coefficient

Amsterdam Commodities  Shell PLC

Very good diversification

The 3 months correlation between Amsterdam and Shell is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Amsterdam Commodities NV and Shell PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shell PLC and Amsterdam Commodities 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 Amsterdam Commodities NV are associated (or correlated) with Shell PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shell PLC has no effect on the direction of Amsterdam Commodities i.e., Amsterdam Commodities and Shell PLC go up and down completely randomly.

Pair Corralation between Amsterdam Commodities and Shell PLC

Assuming the 90 days trading horizon Amsterdam Commodities is expected to generate 1.4 times less return on investment than Shell PLC. In addition to that, Amsterdam Commodities is 1.31 times more volatile than Shell PLC. It trades about 0.04 of its total potential returns per unit of risk. Shell PLC is currently generating about 0.07 per unit of volatility. If you would invest  2,967  in Shell PLC on May 14, 2025 and sell it today you would earn a total of  147.00  from holding Shell PLC or generate 4.95% return on investment over 90 days.

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

Amsterdam Commodities NV  vs.  Shell PLC

Amsterdam Commodities

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Amsterdam Commodities NV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Amsterdam Commodities is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Shell PLC

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Shell PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Shell PLC is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amsterdam Commodities and Shell PLC

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

The idea behind Amsterdam Commodities NV and Shell PLC 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.