Correlation Between HAL Trust and NV Nederlandsche

Can any of the company-specific risk be diversified away by investing in both HAL Trust and NV Nederlandsche 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 HAL Trust and NV Nederlandsche into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for HAL Trust and NV Nederlandsche

0.81

Correlation Coefficient

HAL Trust  NV Nederlandsche

Very poor diversification

The 3 months correlation between HAL and NEDAP is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding HAL Trust and NV Nederlandsche Apparatenfabr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Nederlandsche App and HAL Trust 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 HAL Trust are associated (or correlated) with NV Nederlandsche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Nederlandsche App has no effect on the direction of HAL Trust i.e., HAL Trust and NV Nederlandsche go up and down completely randomly.

Pair Corralation between HAL Trust and NV Nederlandsche

Assuming the 90 days trading horizon HAL Trust is expected to generate 2.49 times less return on investment than NV Nederlandsche. But when comparing it to its historical volatility, HAL Trust is 2.26 times less risky than NV Nederlandsche. It trades about 0.23 of its potential returns per unit of risk. NV Nederlandsche Apparatenfabriek is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  6,100  in NV Nederlandsche Apparatenfabriek on April 22, 2025 and sell it today you would earn a total of  1,980  from holding NV Nederlandsche Apparatenfabriek or generate 32.46% return on investment over 90 days.

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

HAL Trust  vs.  NV Nederlandsche Apparatenfabr

HAL Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HAL Trust are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, HAL Trust may actually be approaching a critical reversion point that can send shares even higher in August 2025.

NV Nederlandsche App

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NV Nederlandsche Apparatenfabriek are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, NV Nederlandsche sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HAL Trust and NV Nederlandsche

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

The idea behind HAL Trust and NV Nederlandsche Apparatenfabriek 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.