Correlation Between Retail Estates and NN Group

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

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

Diversification Opportunities for Retail Estates and NN Group

0.84

Correlation Coefficient

Retail Estates  NN Group

Very poor diversification

The 3 months correlation between Retail and 2NN is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates 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 Retail Estates 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 Retail Estates 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 Retail Estates i.e., Retail Estates and NN Group go up and down completely randomly.

Pair Corralation between Retail Estates and NN Group

Assuming the 90 days horizon Retail Estates is expected to generate 1.07 times less return on investment than NN Group. In addition to that, Retail Estates is 1.11 times more volatile than NN Group NV. It trades about 0.2 of its total potential returns per unit of risk. NN Group NV is currently generating about 0.23 per unit of volatility. If you would invest  5,116  in NN Group NV on April 25, 2025 and sell it today you would earn a total of  724.00  from holding NN Group NV or generate 14.15% return on investment over 90 days.

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

Retail Estates NV  vs.  NN Group NV

Retail Estates NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Retail Estates NV are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Retail Estates reported 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 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NN Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Retail Estates and NN Group

The main advantage of trading using opposite Retail Estates and NN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates 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 Retail Estates 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.