Correlation Between Sligro Food and TKH Group

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

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

Diversification Opportunities for Sligro Food and TKH Group

0.81

Correlation Coefficient

Sligro Food  TKH Group

Very poor diversification

The 3 months correlation between Sligro and TKH is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group 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 Sligro Food 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 Sligro Food Group 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 Sligro Food i.e., Sligro Food and TKH Group go up and down completely randomly.

Pair Corralation between Sligro Food and TKH Group

Assuming the 90 days trading horizon Sligro Food is expected to generate 3.17 times less return on investment than TKH Group. In addition to that, Sligro Food is 1.93 times more volatile than TKH Group NV. It trades about 0.03 of its total potential returns per unit of risk. TKH Group NV is currently generating about 0.2 per unit of volatility. If you would invest  3,287  in TKH Group NV on April 21, 2025 and sell it today you would earn a total of  569.00  from holding TKH Group NV or generate 17.31% return on investment over 90 days.

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

Sligro Food Group  vs.  TKH Group NV

Sligro Food Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sligro Food Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sligro Food is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, TKH Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sligro Food and TKH Group

The main advantage of trading using opposite Sligro Food and TKH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food 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 Sligro Food Group 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .