Correlation Between ASM International and TKH Group

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

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

Diversification Opportunities for ASM International and TKH Group

0.72

Correlation Coefficient

ASM International  TKH Group

Poor diversification

The 3 months correlation between ASM and TKH is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding ASM International NV 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 ASM International 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 ASM International NV 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 ASM International i.e., ASM International and TKH Group go up and down completely randomly.

Pair Corralation between ASM International and TKH Group

Assuming the 90 days trading horizon ASM International NV is expected to under-perform the TKH Group. In addition to that, ASM International is 1.79 times more volatile than TKH Group NV. It trades about -0.08 of its total potential returns per unit of risk. TKH Group NV is currently generating about -0.1 per unit of volatility. If you would invest  3,710  in TKH Group NV on May 18, 2025 and sell it today you would lose (336.00) from holding TKH Group NV or give up 9.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.48%
Values	Daily Returns

ASM International NV  vs.  TKH Group NV

ASM International

Risk-Adjusted Performance

Weakest

Over the last 90 days ASM International NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

TKH Group NV

Risk-Adjusted Performance

Weakest

Over the last 90 days TKH Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with ASM International and TKH Group

The main advantage of trading using opposite ASM International and TKH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASM International 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 ASM International NV 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.