Correlation Between NN Group and Van Lanschot

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

Diversification Opportunities for NN Group and Van Lanschot

0.34

Correlation Coefficient

NN Group  Van Lanschot

Weak diversification

The 3 months correlation between NN Group and Van is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NN Group NV and Van Lanschot NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Van Lanschot 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 Van Lanschot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Van Lanschot NV has no effect on the direction of NN Group i.e., NN Group and Van Lanschot go up and down completely randomly.

Pair Corralation between NN Group and Van Lanschot

Assuming the 90 days horizon NN Group NV is expected to generate 0.49 times more return on investment than Van Lanschot. However, NN Group NV is 2.06 times less risky than Van Lanschot. It trades about 0.32 of its potential returns per unit of risk. Van Lanschot NV is currently generating about 0.09 per unit of risk. If you would invest  4,180  in NN Group NV on December 29, 2024 and sell it today you would earn a total of  978.00  from holding NN Group NV or generate 23.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

NN Group NV  vs.  Van Lanschot 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 25 (%) 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.

Van Lanschot NV

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Van Lanschot NV are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking signals, Van Lanschot may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NN Group and Van Lanschot

The main advantage of trading using opposite NN Group and Van Lanschot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN Group position performs unexpectedly, Van Lanschot 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 Van Lanschot will offset losses from the drop in Van Lanschot's long position.

The idea behind NN Group NV and Van Lanschot 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.