Correlation Between NN Group and Aperam SA
Can any of the company-specific risk be diversified away by investing in both NN Group and Aperam SA 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 Aperam SA 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 Aperam SA, you can compare the effects of market volatilities on NN Group and Aperam SA 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 Aperam SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NN Group and Aperam SA.
Diversification Opportunities for NN Group and Aperam SA
Good diversification
The 3 months correlation between NN Group and Aperam is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding NN Group NV and Aperam SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aperam SA 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 Aperam SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aperam SA has no effect on the direction of NN Group i.e., NN Group and Aperam SA go up and down completely randomly.
Pair Corralation between NN Group and Aperam SA
Assuming the 90 days horizon NN Group NV is expected to under-perform the Aperam SA. But the stock apears to be less risky and, when comparing its historical volatility, NN Group NV is 1.9 times less risky than Aperam SA. The stock trades about -0.17 of its potential returns per unit of risk. The Aperam SA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,517 in Aperam SA on August 27, 2024 and sell it today you would earn a total of 217.00 from holding Aperam SA or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NN Group NV vs. Aperam SA
Performance |
| Timeline |
| NN Group NV |
| Aperam SA |
NN Group and Aperam SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NN Group and Aperam SA
The main advantage of trading using opposite NN Group and Aperam SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN Group position performs unexpectedly, Aperam SA 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 Aperam SA will offset losses from the drop in Aperam SA'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 |
| Aperam SA vs. ArcelorMittal SA | Aperam SA vs. NN Group NV | Aperam SA vs. SBM Offshore NV | Aperam SA vs. BE Semiconductor Industries |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |