Correlation Between VAT Group and TKH Group

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

Diversification Opportunities for VAT Group and TKH Group

0.91

Correlation Coefficient

VAT Group  TKH Group

Almost no diversification

The 3 months correlation between VAT and TKH is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding VAT Group AG 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 VAT 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 VAT Group AG 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 VAT Group i.e., VAT Group and TKH Group go up and down completely randomly.

Pair Corralation between VAT Group and TKH Group

Assuming the 90 days trading horizon VAT Group AG is expected to generate 1.54 times more return on investment than TKH Group. However, VAT Group is 1.54 times more volatile than TKH Group NV. It trades about 0.21 of its potential returns per unit of risk. TKH Group NV is currently generating about 0.2 per unit of risk. If you would invest  26,593  in VAT Group AG on April 21, 2025 and sell it today you would earn a total of  7,397  from holding VAT Group AG or generate 27.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	96.88%
Values	Daily Returns

VAT Group AG  vs.  TKH Group NV

VAT Group AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VAT Group AG are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, VAT Group showed 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 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 VAT Group and TKH Group

The main advantage of trading using opposite VAT Group and TKH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VAT 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 VAT Group AG 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 CEOs Directory module to screen CEOs from public companies around the world.