Correlation Between ABN Amro and TKH Group
Can any of the company-specific risk be diversified away by investing in both ABN Amro and TKH Group 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 ABN Amro and TKH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABN Amro Group and TKH Group NV, you can compare the effects of market volatilities on ABN Amro and TKH Group 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 ABN Amro with a short position of TKH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABN Amro and TKH Group.
Diversification Opportunities for ABN Amro and TKH Group
Poor diversification
The 3 months correlation between ABN and TKH is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ABN Amro Group and TKH Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKH Group NV and ABN Amro 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 ABN Amro Group are associated (or correlated) with TKH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKH Group NV has no effect on the direction of ABN Amro i.e., ABN Amro and TKH Group go up and down completely randomly.
Pair Corralation between ABN Amro and TKH Group
Assuming the 90 days trading horizon ABN Amro Group is expected to generate 0.62 times more return on investment than TKH Group. However, ABN Amro Group is 1.62 times less risky than TKH Group. It trades about -0.18 of its potential returns per unit of risk. TKH Group NV is currently generating about -0.19 per unit of risk. If you would invest 1,617 in ABN Amro Group on August 26, 2024 and sell it today you would lose (143.00) from holding ABN Amro Group or give up 8.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABN Amro Group vs. TKH Group NV
Performance |
| Timeline |
| ABN Amro Group |
| TKH Group NV |
ABN Amro and TKH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABN Amro and TKH Group
The main advantage of trading using opposite ABN Amro and TKH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABN Amro position performs unexpectedly, TKH Group 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 TKH Group will offset losses from the drop in TKH Group's long position.| ABN Amro vs. ING Groep NV | ABN Amro vs. Aegon NV | ABN Amro vs. NN Group NV | ABN Amro vs. Koninklijke Ahold Delhaize |
| TKH Group vs. Aalberts Industries NV | TKH Group vs. BE Semiconductor Industries | TKH Group vs. AMG Advanced Metallurgical | TKH Group vs. Koninklijke Vopak NV |
Check out your portfolio center.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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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