Correlation Between TKH Group and Value8 NV
Can any of the company-specific risk be diversified away by investing in both TKH Group and Value8 NV 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 Value8 NV 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 Value8 NV, you can compare the effects of market volatilities on TKH Group and Value8 NV 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 Value8 NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKH Group and Value8 NV.
Diversification Opportunities for TKH Group and Value8 NV
Good diversification
The 3 months correlation between TKH and Value8 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding TKH Group NV and Value8 NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value8 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 Value8 NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value8 NV has no effect on the direction of TKH Group i.e., TKH Group and Value8 NV go up and down completely randomly.
Pair Corralation between TKH Group and Value8 NV
Assuming the 90 days trading horizon TKH Group NV is expected to under-perform the Value8 NV. In addition to that, TKH Group is 1.73 times more volatile than Value8 NV. It trades about -0.36 of its total potential returns per unit of risk. Value8 NV is currently generating about -0.02 per unit of volatility. If you would invest 570.00 in Value8 NV on August 27, 2024 and sell it today you would lose (5.00) from holding Value8 NV or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TKH Group NV vs. Value8 NV
Performance |
| Timeline |
| TKH Group NV |
| Value8 NV |
TKH Group and Value8 NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TKH Group and Value8 NV
The main advantage of trading using opposite TKH Group and Value8 NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKH Group position performs unexpectedly, Value8 NV 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 Value8 NV will offset losses from the drop in Value8 NV'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 |
| Value8 NV vs. Pershing Square Holdings | Value8 NV vs. Universal Music Group | Value8 NV vs. BlackRock ESG Multi Asset | Value8 NV vs. Aalberts Industries 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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