Correlation Between Holland Colours and TomTom NV
Can any of the company-specific risk be diversified away by investing in both Holland Colours and TomTom NV 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 Holland Colours and TomTom NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holland Colours NV and TomTom NV, you can compare the effects of market volatilities on Holland Colours and TomTom NV 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 Holland Colours with a short position of TomTom NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holland Colours and TomTom NV.
Diversification Opportunities for Holland Colours and TomTom NV
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Holland and TomTom is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Holland Colours NV and TomTom NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TomTom NV and Holland Colours 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 Holland Colours NV are associated (or correlated) with TomTom NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TomTom NV has no effect on the direction of Holland Colours i.e., Holland Colours and TomTom NV go up and down completely randomly.
Pair Corralation between Holland Colours and TomTom NV
Assuming the 90 days trading horizon Holland Colours NV is expected to under-perform the TomTom NV. But the stock apears to be less risky and, when comparing its historical volatility, Holland Colours NV is 1.67 times less risky than TomTom NV. The stock trades about -0.08 of its potential returns per unit of risk. The TomTom NV is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 501.00 in TomTom NV on September 1, 2024 and sell it today you would earn a total of 27.00 from holding TomTom NV or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holland Colours NV vs. TomTom NV
Performance |
| Timeline |
| Holland Colours NV |
| TomTom NV |
Holland Colours and TomTom NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holland Colours and TomTom NV
The main advantage of trading using opposite Holland Colours and TomTom NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holland Colours position performs unexpectedly, TomTom NV 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 TomTom NV will offset losses from the drop in TomTom NV's long position.| Holland Colours vs. NV Nederlandsche Apparatenfabriek | Holland Colours vs. Hydratec Industries NV | Holland Colours vs. Amsterdam Commodities NV | Holland Colours vs. Aalberts Industries NV |
| TomTom NV vs. ForFarmers NV | TomTom NV vs. Sligro Food Group | TomTom NV vs. Amsterdam Commodities NV | TomTom NV vs. Brunel International 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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