Correlation Between ASR Nederland and TKH Group

Can any of the company-specific risk be diversified away by investing in both ASR Nederland and TKH Group 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 ASR Nederland and TKH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ASR Nederland NV and TKH Group NV, you can compare the effects of market volatilities on ASR Nederland and TKH Group 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 ASR Nederland with a short position of TKH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASR Nederland and TKH Group.

Diversification Opportunities for ASR Nederland and TKH Group

-0.57

Correlation Coefficient

ASR Nederland  TKH Group

Excellent diversification

The 3 months correlation between ASR and TKH is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding ASR Nederland NV and TKH Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKH Group NV and ASR Nederland 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 ASR Nederland NV are associated (or correlated) with TKH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKH Group NV has no effect on the direction of ASR Nederland i.e., ASR Nederland and TKH Group go up and down completely randomly.

Pair Corralation between ASR Nederland and TKH Group

Assuming the 90 days trading horizon ASR Nederland NV is expected to generate 0.94 times more return on investment than TKH Group. However, ASR Nederland NV is 1.07 times less risky than TKH Group. It trades about 0.03 of its potential returns per unit of risk. TKH Group NV is currently generating about -0.01 per unit of risk. If you would invest  3,871  in ASR Nederland NV on September 19, 2024 and sell it today you would earn a total of  595.00  from holding ASR Nederland NV or generate 15.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

ASR Nederland NV  vs.  TKH Group NV

ASR Nederland NV

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASR Nederland NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ASR Nederland is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

TKH Group NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TKH Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with ASR Nederland and TKH Group

The main advantage of trading using opposite ASR Nederland and TKH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASR Nederland position performs unexpectedly, TKH Group 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 TKH Group will offset losses from the drop in TKH Group's long position.

The idea behind ASR Nederland NV and TKH Group NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.