Correlation Between TKH Group and Koninklijke Vopak
Can any of the company-specific risk be diversified away by investing in both TKH Group and Koninklijke Vopak 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 Koninklijke Vopak 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 Koninklijke Vopak NV, you can compare the effects of market volatilities on TKH Group and Koninklijke Vopak 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 Koninklijke Vopak. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKH Group and Koninklijke Vopak.
Diversification Opportunities for TKH Group and Koninklijke Vopak
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TKH and Koninklijke is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding TKH Group NV and Koninklijke Vopak NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Vopak 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 Koninklijke Vopak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Vopak has no effect on the direction of TKH Group i.e., TKH Group and Koninklijke Vopak go up and down completely randomly.
Pair Corralation between TKH Group and Koninklijke Vopak
Assuming the 90 days trading horizon TKH Group NV is expected to under-perform the Koninklijke Vopak. In addition to that, TKH Group is 1.23 times more volatile than Koninklijke Vopak NV. It trades about -0.01 of its total potential returns per unit of risk. Koninklijke Vopak NV is currently generating about 0.09 per unit of volatility. If you would invest 2,610 in Koninklijke Vopak NV on August 29, 2024 and sell it today you would earn a total of 1,798 from holding Koninklijke Vopak NV or generate 68.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TKH Group NV vs. Koninklijke Vopak NV
Performance |
| Timeline |
| TKH Group NV |
| Koninklijke Vopak |
TKH Group and Koninklijke Vopak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TKH Group and Koninklijke Vopak
The main advantage of trading using opposite TKH Group and Koninklijke Vopak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKH Group position performs unexpectedly, Koninklijke Vopak 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 Vopak will offset losses from the drop in Koninklijke Vopak'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 |
| Koninklijke Vopak vs. Aalberts Industries NV | Koninklijke Vopak vs. SBM Offshore NV | Koninklijke Vopak vs. NN Group NV | Koninklijke Vopak vs. Randstad 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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