Correlation Between NSI NV and Van Lanschot

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

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

Diversification Opportunities for NSI NV and Van Lanschot

0.8

Correlation Coefficient

NSI NV  Van Lanschot

Very poor diversification

The 3 months correlation between NSI and Van is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding NSI 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 NSI NV 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 NSI 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 NSI NV i.e., NSI NV and Van Lanschot go up and down completely randomly.

Pair Corralation between NSI NV and Van Lanschot

Assuming the 90 days trading horizon NSI NV is expected to generate 1.42 times more return on investment than Van Lanschot. However, NSI NV is 1.42 times more volatile than Van Lanschot NV. It trades about 0.14 of its potential returns per unit of risk. Van Lanschot NV is currently generating about 0.18 per unit of risk. If you would invest  1,968  in NSI NV on November 28, 2024 and sell it today you would earn a total of  272.00  from holding NSI NV or generate 13.82% return on investment over 90 days.

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

NSI NV  vs.  Van Lanschot NV

NSI NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NSI NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, NSI NV unveiled solid returns over the last few months and may actually be approaching a breakup point.

Van Lanschot NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Van Lanschot NV are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking signals, Van Lanschot unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NSI NV and Van Lanschot

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