Correlation Between TKH Group and NV Nederlandsche
Can any of the company-specific risk be diversified away by investing in both TKH Group and NV Nederlandsche 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 TKH Group and NV Nederlandsche into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TKH Group NV and NV Nederlandsche Apparatenfabriek, you can compare the effects of market volatilities on TKH Group and NV Nederlandsche 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 TKH Group with a short position of NV Nederlandsche. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKH Group and NV Nederlandsche.
Diversification Opportunities for TKH Group and NV Nederlandsche
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TKH and NEDAP is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding TKH Group NV and NV Nederlandsche Apparatenfabr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Nederlandsche App and TKH 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 TKH Group NV are associated (or correlated) with NV Nederlandsche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Nederlandsche App has no effect on the direction of TKH Group i.e., TKH Group and NV Nederlandsche go up and down completely randomly.
Pair Corralation between TKH Group and NV Nederlandsche
Assuming the 90 days trading horizon TKH Group NV is expected to under-perform the NV Nederlandsche. In addition to that, TKH Group is 2.48 times more volatile than NV Nederlandsche Apparatenfabriek. It trades about -0.33 of its total potential returns per unit of risk. NV Nederlandsche Apparatenfabriek is currently generating about -0.21 per unit of volatility. If you would invest 5,480 in NV Nederlandsche Apparatenfabriek on August 26, 2024 and sell it today you would lose (240.00) from holding NV Nederlandsche Apparatenfabriek or give up 4.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TKH Group NV vs. NV Nederlandsche Apparatenfabr
Performance |
| Timeline |
| TKH Group NV |
| NV Nederlandsche App |
TKH Group and NV Nederlandsche Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TKH Group and NV Nederlandsche
The main advantage of trading using opposite TKH Group and NV Nederlandsche positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKH Group position performs unexpectedly, NV Nederlandsche 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 NV Nederlandsche will offset losses from the drop in NV Nederlandsche's long position.| TKH Group vs. Aalberts Industries NV | TKH Group vs. BE Semiconductor Industries | TKH Group vs. AMG Advanced Metallurgical | TKH Group vs. Koninklijke Vopak NV |
| NV Nederlandsche vs. TKH Group NV | NV Nederlandsche vs. Aalberts Industries NV | NV Nederlandsche vs. Amsterdam Commodities NV | NV Nederlandsche vs. iShares SP 500 |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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