Correlation Between NN Group and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both NN Group and AMG Advanced 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 NN Group and AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NN Group NV and AMG Advanced Metallurgical, you can compare the effects of market volatilities on NN Group and AMG Advanced 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 NN Group with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of NN Group and AMG Advanced.
Diversification Opportunities for NN Group and AMG Advanced
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NN Group and AMG is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding NN Group NV and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and NN Group 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 NN Group NV are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of NN Group i.e., NN Group and AMG Advanced go up and down completely randomly.
Pair Corralation between NN Group and AMG Advanced
Assuming the 90 days horizon NN Group is expected to generate 1.72 times less return on investment than AMG Advanced. But when comparing it to its historical volatility, NN Group NV is 1.81 times less risky than AMG Advanced. It trades about 0.34 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,354 in AMG Advanced Metallurgical on November 28, 2024 and sell it today you would earn a total of 226.00 from holding AMG Advanced Metallurgical or generate 16.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NN Group NV vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| NN Group NV |
| AMG Advanced Metallu |
NN Group and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NN Group and AMG Advanced
The main advantage of trading using opposite NN Group and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN Group position performs unexpectedly, AMG Advanced 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 AMG Advanced will offset losses from the drop in AMG Advanced's long position.| NN Group vs. ASR Nederland NV | NN Group vs. Aegon NV | NN Group vs. Koninklijke Ahold Delhaize | NN Group vs. ABN Amro Group |
| AMG Advanced vs. BE Semiconductor Industries | AMG Advanced vs. TKH Group NV | AMG Advanced vs. OCI NV | AMG Advanced 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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