Correlation Between NN Group and Fugro NV

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both NN Group and Fugro 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 NN Group and Fugro NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NN Group NV and Fugro NV, you can compare the effects of market volatilities on NN Group and Fugro 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 NN Group with a short position of Fugro NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of NN Group and Fugro NV.

Diversification Opportunities for NN Group and Fugro NV

NN GroupFugroDiversified AwayNN GroupFugroDiversified Away100%
0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between NN Group and Fugro is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding NN Group NV and Fugro NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fugro NV and NN 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 NN Group NV are associated (or correlated) with Fugro NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fugro NV has no effect on the direction of NN Group i.e., NN Group and Fugro NV go up and down completely randomly.

Pair Corralation between NN Group and Fugro NV

Assuming the 90 days horizon NN Group NV is expected to under-perform the Fugro NV. But the stock apears to be less risky and, when comparing its historical volatility, NN Group NV is 1.83 times less risky than Fugro NV. The stock trades about -0.41 of its potential returns per unit of risk. The Fugro NV is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,680  in Fugro NV on September 20, 2024 and sell it today you would lose (15.00) from holding Fugro NV or give up 0.89% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

NN Group NV  vs.  Fugro NV

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -20-15-10-505
JavaScript chart by amCharts 3.21.15NN FUR
       Timeline  
NN Group NV 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days NN Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec424344454647
Fugro NV 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fugro NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec16171819202122

NN Group and Fugro NV Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.43-1.07-0.71-0.35-0.04190.190.550.911.27 0.10.20.30.40.5
JavaScript chart by amCharts 3.21.15NN FUR
       Returns  

Pair Trading with NN Group and Fugro NV

The main advantage of trading using opposite NN Group and Fugro NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN Group position performs unexpectedly, Fugro 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 Fugro NV will offset losses from the drop in Fugro NV's long position.
The idea behind NN Group NV and Fugro 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.
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

Other Complementary Tools

Money Managers
Screen money managers from public funds and ETFs managed around the world
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.