Correlation Between NV Nederlandsche and Kendrion
Can any of the company-specific risk be diversified away by investing in both NV Nederlandsche and Kendrion 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 NV Nederlandsche and Kendrion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NV Nederlandsche Apparatenfabriek and Kendrion NV, you can compare the effects of market volatilities on NV Nederlandsche and Kendrion 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 NV Nederlandsche with a short position of Kendrion. Check out your portfolio center. Please also check ongoing floating volatility patterns of NV Nederlandsche and Kendrion.
Diversification Opportunities for NV Nederlandsche and Kendrion
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between NEDAP and Kendrion is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding NV Nederlandsche Apparatenfabr and Kendrion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kendrion NV and NV Nederlandsche 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 NV Nederlandsche Apparatenfabriek are associated (or correlated) with Kendrion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kendrion NV has no effect on the direction of NV Nederlandsche i.e., NV Nederlandsche and Kendrion go up and down completely randomly.
Pair Corralation between NV Nederlandsche and Kendrion
Assuming the 90 days trading horizon NV Nederlandsche Apparatenfabriek is expected to generate 1.22 times more return on investment than Kendrion. However, NV Nederlandsche is 1.22 times more volatile than Kendrion NV. It trades about 0.27 of its potential returns per unit of risk. Kendrion NV is currently generating about -0.06 per unit of risk. If you would invest 5,420 in NV Nederlandsche Apparatenfabriek on October 25, 2024 and sell it today you would earn a total of 420.00 from holding NV Nederlandsche Apparatenfabriek or generate 7.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NV Nederlandsche Apparatenfabr vs. Kendrion NV
Performance |
| Timeline |
| NV Nederlandsche App |
| Kendrion NV |
NV Nederlandsche and Kendrion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NV Nederlandsche and Kendrion
The main advantage of trading using opposite NV Nederlandsche and Kendrion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NV Nederlandsche position performs unexpectedly, Kendrion 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 Kendrion will offset losses from the drop in Kendrion's long position.| NV Nederlandsche vs. TKH Group NV | NV Nederlandsche vs. Aalberts Industries NV | NV Nederlandsche vs. Kendrion NV | NV Nederlandsche vs. Amsterdam Commodities NV |
| Kendrion vs. TKH Group NV | Kendrion vs. NV Nederlandsche Apparatenfabriek | Kendrion vs. Brunel International NV | Kendrion vs. Aalberts Industries 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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