Correlation Between NN Group and TKH Group

Can any of the company-specific risk be diversified away by investing in both NN Group 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 NN Group and TKH Group 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 TKH Group NV, you can compare the effects of market volatilities on NN Group 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 NN Group with a short position of TKH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NN Group and TKH Group.

Diversification Opportunities for NN Group and TKH Group

0.89

Correlation Coefficient

NN Group  TKH Group

Very poor diversification

The 3 months correlation between NN Group and TKH is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding NN Group 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 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 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 NN Group i.e., NN Group and TKH Group go up and down completely randomly.

Pair Corralation between NN Group and TKH Group

Assuming the 90 days horizon NN Group NV is expected to generate 0.57 times more return on investment than TKH Group. However, NN Group NV is 1.74 times less risky than TKH Group. It trades about 0.28 of its potential returns per unit of risk. TKH Group NV is currently generating about 0.14 per unit of risk. If you would invest  5,046  in NN Group NV on April 24, 2025 and sell it today you would earn a total of  702.00  from holding NN Group NV or generate 13.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

NN Group NV  vs.  TKH Group NV

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 22 (%) 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.

TKH Group NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TKH Group NV are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, TKH Group may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with NN Group and TKH Group

The main advantage of trading using opposite NN Group and TKH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN Group 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 NN Group 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.