Correlation Between TKH Group and Sif Holding
Can any of the company-specific risk be diversified away by investing in both TKH Group and Sif Holding 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 Sif Holding 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 Sif Holding NV, you can compare the effects of market volatilities on TKH Group and Sif Holding 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 Sif Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKH Group and Sif Holding.
Diversification Opportunities for TKH Group and Sif Holding
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TKH and Sif is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding TKH Group NV and Sif Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sif Holding NV 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 Sif Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sif Holding NV has no effect on the direction of TKH Group i.e., TKH Group and Sif Holding go up and down completely randomly.
Pair Corralation between TKH Group and Sif Holding
Assuming the 90 days trading horizon TKH Group NV is expected to generate 0.83 times more return on investment than Sif Holding. However, TKH Group NV is 1.21 times less risky than Sif Holding. It trades about -0.23 of its potential returns per unit of risk. Sif Holding NV is currently generating about -0.2 per unit of risk. If you would invest 3,284 in TKH Group NV on September 13, 2024 and sell it today you would lose (188.00) from holding TKH Group NV or give up 5.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
TKH Group NV vs. Sif Holding NV
Performance |
| Timeline |
| TKH Group NV |
| Sif Holding NV |
TKH Group and Sif Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TKH Group and Sif Holding
The main advantage of trading using opposite TKH Group and Sif Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKH Group position performs unexpectedly, Sif Holding 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 Sif Holding will offset losses from the drop in Sif Holding'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 |
| Sif Holding vs. Akzo Nobel NV | Sif Holding vs. Koninklijke KPN NV | Sif Holding vs. Aegon NV | Sif Holding vs. Wolters Kluwer 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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