Correlation Between NN Group and Koninklijke Heijmans
Can any of the company-specific risk be diversified away by investing in both NN Group and Koninklijke Heijmans 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 Koninklijke Heijmans 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 Koninklijke Heijmans NV, you can compare the effects of market volatilities on NN Group and Koninklijke Heijmans 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 Koninklijke Heijmans. Check out your portfolio center. Please also check ongoing floating volatility patterns of NN Group and Koninklijke Heijmans.
Diversification Opportunities for NN Group and Koninklijke Heijmans
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between NN Group and Koninklijke is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding NN Group NV and Koninklijke Heijmans NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Heijmans 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 Koninklijke Heijmans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Heijmans has no effect on the direction of NN Group i.e., NN Group and Koninklijke Heijmans go up and down completely randomly.
Pair Corralation between NN Group and Koninklijke Heijmans
Assuming the 90 days horizon NN Group NV is expected to under-perform the Koninklijke Heijmans. But the stock apears to be less risky and, when comparing its historical volatility, NN Group NV is 3.24 times less risky than Koninklijke Heijmans. The stock trades about -0.06 of its potential returns per unit of risk. The Koninklijke Heijmans NV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,570 in Koninklijke Heijmans NV on August 28, 2024 and sell it today you would earn a total of 180.00 from holding Koninklijke Heijmans NV or generate 7.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NN Group NV vs. Koninklijke Heijmans NV
Performance |
| Timeline |
| NN Group NV |
| Koninklijke Heijmans |
NN Group and Koninklijke Heijmans Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NN Group and Koninklijke Heijmans
The main advantage of trading using opposite NN Group and Koninklijke Heijmans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN Group position performs unexpectedly, Koninklijke Heijmans 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 Koninklijke Heijmans will offset losses from the drop in Koninklijke Heijmans' 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 |
| Koninklijke Heijmans vs. Fugro NV | Koninklijke Heijmans vs. SBM Offshore NV | Koninklijke Heijmans vs. Aegon NV | Koninklijke Heijmans vs. PostNL 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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