Correlation Between Arcadis NV and TKH Group
Can any of the company-specific risk be diversified away by investing in both Arcadis NV 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 Arcadis NV and TKH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcadis NV and TKH Group NV, you can compare the effects of market volatilities on Arcadis NV 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 Arcadis NV with a short position of TKH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcadis NV and TKH Group.
Diversification Opportunities for Arcadis NV and TKH Group
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arcadis and TKH is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Arcadis NV 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 Arcadis 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 Arcadis NV 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 Arcadis NV i.e., Arcadis NV and TKH Group go up and down completely randomly.
Pair Corralation between Arcadis NV and TKH Group
Assuming the 90 days trading horizon Arcadis NV is expected to generate 0.74 times more return on investment than TKH Group. However, Arcadis NV is 1.36 times less risky than TKH Group. It trades about 0.09 of its potential returns per unit of risk. TKH Group NV is currently generating about -0.01 per unit of risk. If you would invest 3,690 in Arcadis NV on September 2, 2024 and sell it today you would earn a total of 2,555 from holding Arcadis NV or generate 69.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcadis NV vs. TKH Group NV
Performance |
| Timeline |
| Arcadis NV |
| TKH Group NV |
Arcadis NV and TKH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcadis NV and TKH Group
The main advantage of trading using opposite Arcadis NV and TKH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcadis NV 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.| Arcadis NV vs. Aalberts Industries NV | Arcadis NV vs. TKH Group NV | Arcadis NV vs. Koninklijke BAM Groep | Arcadis NV vs. SBM Offshore NV |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |