Correlation Between Aalberts Industries and NN Group

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

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

Diversification Opportunities for Aalberts Industries and NN Group

0.85

Correlation Coefficient

Aalberts Industries  NN Group

Very poor diversification

The 3 months correlation between Aalberts and NN Group is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aalberts Industries NV and NN Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NN Group NV and Aalberts Industries 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 Aalberts Industries NV are associated (or correlated) with NN Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NN Group NV has no effect on the direction of Aalberts Industries i.e., Aalberts Industries and NN Group go up and down completely randomly.

Pair Corralation between Aalberts Industries and NN Group

Assuming the 90 days trading horizon Aalberts Industries NV is expected to generate 2.33 times more return on investment than NN Group. However, Aalberts Industries is 2.33 times more volatile than NN Group NV. It trades about 0.17 of its potential returns per unit of risk. NN Group NV is currently generating about 0.33 per unit of risk. If you would invest  2,664  in Aalberts Industries NV on April 22, 2025 and sell it today you would earn a total of  518.00  from holding Aalberts Industries NV or generate 19.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Aalberts Industries NV  vs.  NN Group NV

Aalberts Industries

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aalberts Industries NV are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aalberts Industries unveiled solid returns over the last few months and may actually be approaching a breakup point.

NN Group NV

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NN Group NV are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, NN Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aalberts Industries and NN Group

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

The idea behind Aalberts Industries NV and NN 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.