Correlation Between NN Group and ASR Nederland
Can any of the company-specific risk be diversified away by investing in both NN Group and ASR Nederland 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 ASR Nederland 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 ASR Nederland NV, you can compare the effects of market volatilities on NN Group and ASR Nederland 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 ASR Nederland. Check out your portfolio center. Please also check ongoing floating volatility patterns of NN Group and ASR Nederland.
Diversification Opportunities for NN Group and ASR Nederland
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NN Group and ASR is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding NN Group NV and ASR Nederland NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASR Nederland NV 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 ASR Nederland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASR Nederland NV has no effect on the direction of NN Group i.e., NN Group and ASR Nederland go up and down completely randomly.
Pair Corralation between NN Group and ASR Nederland
Assuming the 90 days horizon NN Group is expected to generate 1.19 times less return on investment than ASR Nederland. In addition to that, NN Group is 1.06 times more volatile than ASR Nederland NV. It trades about 0.27 of its total potential returns per unit of risk. ASR Nederland NV is currently generating about 0.34 per unit of volatility. If you would invest 4,461 in ASR Nederland NV on October 24, 2024 and sell it today you would earn a total of 254.00 from holding ASR Nederland NV or generate 5.69% 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. ASR Nederland NV
Performance |
| Timeline |
| NN Group NV |
| ASR Nederland NV |
NN Group and ASR Nederland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NN Group and ASR Nederland
The main advantage of trading using opposite NN Group and ASR Nederland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN Group position performs unexpectedly, ASR Nederland 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 ASR Nederland will offset losses from the drop in ASR Nederland'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 |
| ASR Nederland vs. NN Group NV | ASR Nederland vs. Koninklijke Ahold Delhaize | ASR Nederland vs. BE Semiconductor Industries | ASR Nederland vs. Aegon 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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