Correlation Between RENEWI and TKH Group

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

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

Diversification Opportunities for RENEWI and TKH Group

-0.52

Correlation Coefficient

RENEWI  TKH Group

Excellent diversification

The 3 months correlation between RENEWI and TKH is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding RENEWI 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 RENEWI 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 RENEWI 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 RENEWI i.e., RENEWI and TKH Group go up and down completely randomly.

Pair Corralation between RENEWI and TKH Group

Assuming the 90 days trading horizon RENEWI is expected to under-perform the TKH Group. In addition to that, RENEWI is 10.08 times more volatile than TKH Group NV. It trades about -0.12 of its total potential returns per unit of risk. TKH Group NV is currently generating about 0.13 per unit of volatility. If you would invest  3,375  in TKH Group NV on April 24, 2025 and sell it today you would earn a total of  377.00  from holding TKH Group NV or generate 11.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

RENEWI  vs.  TKH Group NV

RENEWI

Risk-Adjusted Performance

Very Weak

Over the last 90 days RENEWI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

TKH Group NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TKH Group NV are ranked lower than 10 (%) 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 RENEWI and TKH Group

The main advantage of trading using opposite RENEWI and TKH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RENEWI 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 RENEWI 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.