Correlation Between ForFarmers and TKH Group
Can any of the company-specific risk be diversified away by investing in both ForFarmers 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 ForFarmers and TKH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ForFarmers NV and TKH Group NV, you can compare the effects of market volatilities on ForFarmers 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 ForFarmers with a short position of TKH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ForFarmers and TKH Group.
Diversification Opportunities for ForFarmers and TKH Group
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ForFarmers and TKH is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ForFarmers 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 ForFarmers 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 ForFarmers 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 ForFarmers i.e., ForFarmers and TKH Group go up and down completely randomly.
Pair Corralation between ForFarmers and TKH Group
Assuming the 90 days trading horizon ForFarmers NV is expected to generate 1.54 times more return on investment than TKH Group. However, ForFarmers is 1.54 times more volatile than TKH Group NV. It trades about 0.57 of its potential returns per unit of risk. TKH Group NV is currently generating about 0.2 per unit of risk. If you would invest 336.00 in ForFarmers NV on December 1, 2024 and sell it today you would earn a total of 78.00 from holding ForFarmers NV or generate 23.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ForFarmers NV vs. TKH Group NV
Performance |
| Timeline |
| ForFarmers NV |
| TKH Group NV |
ForFarmers and TKH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ForFarmers and TKH Group
The main advantage of trading using opposite ForFarmers and TKH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ForFarmers 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.| ForFarmers vs. Koninklijke Heijmans NV | ForFarmers vs. Amsterdam Commodities NV | ForFarmers vs. Flow Traders BV | ForFarmers vs. Koninklijke BAM Groep |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Stocks Directory Find actively traded stocks across global markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |