Correlation Between ASR Nederland and NN Group
Can any of the company-specific risk be diversified away by investing in both ASR Nederland and NN 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 ASR Nederland and NN Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASR Nederland NV and NN Group NV, you can compare the effects of market volatilities on ASR Nederland and NN 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 ASR Nederland with a short position of NN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASR Nederland and NN Group.
Diversification Opportunities for ASR Nederland and NN Group
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between ASR and NN Group is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ASR Nederland NV and NN Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NN Group NV and ASR Nederland 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 ASR Nederland NV are associated (or correlated) with NN Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NN Group NV has no effect on the direction of ASR Nederland i.e., ASR Nederland and NN Group go up and down completely randomly.
Pair Corralation between ASR Nederland and NN Group
Assuming the 90 days trading horizon ASR Nederland is expected to generate 1.07 times less return on investment than NN Group. But when comparing it to its historical volatility, ASR Nederland NV is 1.15 times less risky than NN Group. It trades about 0.24 of its potential returns per unit of risk. NN Group NV is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,237 in NN Group NV on November 3, 2024 and sell it today you would earn a total of 200.00 from holding NN Group NV or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASR Nederland NV vs. NN Group NV
Performance |
| Timeline |
| ASR Nederland NV |
| NN Group NV |
ASR Nederland and NN Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASR Nederland and NN Group
The main advantage of trading using opposite ASR Nederland and NN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASR Nederland position performs unexpectedly, NN 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 NN Group will offset losses from the drop in NN Group's long position.| ASR Nederland vs. NN Group NV | ASR Nederland vs. Koninklijke Ahold Delhaize | ASR Nederland vs. BE Semiconductor Industries | ASR Nederland vs. Aegon NV |
| NN Group vs. ASR Nederland NV | NN Group vs. Aegon NV | NN Group vs. Koninklijke Ahold Delhaize | NN Group vs. ABN Amro Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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