Correlation Between Hydratec Industries and TKH Group
Can any of the company-specific risk be diversified away by investing in both Hydratec Industries 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 Hydratec Industries and TKH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hydratec Industries NV and TKH Group NV, you can compare the effects of market volatilities on Hydratec Industries 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 Hydratec Industries with a short position of TKH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydratec Industries and TKH Group.
Diversification Opportunities for Hydratec Industries and TKH Group
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hydratec and TKH is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hydratec Industries 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 Hydratec Industries 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 Hydratec Industries 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 Hydratec Industries i.e., Hydratec Industries and TKH Group go up and down completely randomly.
Pair Corralation between Hydratec Industries and TKH Group
Assuming the 90 days trading horizon Hydratec Industries NV is expected to generate 0.34 times more return on investment than TKH Group. However, Hydratec Industries NV is 2.91 times less risky than TKH Group. It trades about 0.11 of its potential returns per unit of risk. TKH Group NV is currently generating about -0.36 per unit of risk. If you would invest 15,700 in Hydratec Industries NV on August 27, 2024 and sell it today you would earn a total of 300.00 from holding Hydratec Industries NV or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hydratec Industries NV vs. TKH Group NV
Performance |
| Timeline |
| Hydratec Industries |
| TKH Group NV |
Hydratec Industries and TKH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hydratec Industries and TKH Group
The main advantage of trading using opposite Hydratec Industries and TKH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hydratec Industries 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.| Hydratec Industries vs. Pharming Group NV | Hydratec Industries vs. AMG Advanced Metallurgical | Hydratec Industries vs. BE Semiconductor Industries |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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