Correlation Between Shell PLC and Amsterdam Commodities

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

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

Diversification Opportunities for Shell PLC and Amsterdam Commodities

-0.49

Correlation Coefficient

Shell PLC  Amsterdam Commodities

Very good diversification

The 3 months correlation between Shell and Amsterdam is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Shell PLC and Amsterdam Commodities NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amsterdam Commodities and Shell PLC 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 Shell PLC are associated (or correlated) with Amsterdam Commodities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amsterdam Commodities has no effect on the direction of Shell PLC i.e., Shell PLC and Amsterdam Commodities go up and down completely randomly.

Pair Corralation between Shell PLC and Amsterdam Commodities

Assuming the 90 days trading horizon Shell PLC is expected to generate 0.76 times more return on investment than Amsterdam Commodities. However, Shell PLC is 1.32 times less risky than Amsterdam Commodities. It trades about 0.06 of its potential returns per unit of risk. Amsterdam Commodities NV is currently generating about 0.04 per unit of risk. If you would invest  2,941  in Shell PLC on May 20, 2025 and sell it today you would earn a total of  123.00  from holding Shell PLC or generate 4.18% return on investment over 90 days.

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

Shell PLC  vs.  Amsterdam Commodities NV

Shell PLC

Risk-Adjusted Performance

Mild

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.

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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Shell PLC and Amsterdam Commodities

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

The idea behind Shell PLC and Amsterdam Commodities 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.