Correlation Between TKH Group and AMG Advanced

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

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

Diversification Opportunities for TKH Group and AMG Advanced

0.46

Correlation Coefficient

TKH Group  AMG Advanced

Very weak diversification

The 3 months correlation between TKH and AMG is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding TKH Group NV and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and TKH 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 TKH Group NV are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of TKH Group i.e., TKH Group and AMG Advanced go up and down completely randomly.

Pair Corralation between TKH Group and AMG Advanced

Assuming the 90 days trading horizon TKH Group NV is expected to generate 0.51 times more return on investment than AMG Advanced. However, TKH Group NV is 1.97 times less risky than AMG Advanced. It trades about 0.26 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about 0.09 per unit of risk. If you would invest  3,078  in TKH Group NV on November 29, 2024 and sell it today you would earn a total of  736.00  from holding TKH Group NV or generate 23.91% return on investment over 90 days.

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

TKH Group NV  vs.  AMG Advanced Metallurgical

TKH Group NV

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TKH Group NV are ranked lower than 20 (%) 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.

AMG Advanced Metallu

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AMG Advanced Metallurgical are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, AMG Advanced unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TKH Group and AMG Advanced

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

The idea behind TKH Group NV and AMG Advanced Metallurgical 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.