Correlation Between Alfen Beheer and Fastned BV

Can any of the company-specific risk be diversified away by investing in both Alfen Beheer and Fastned BV 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 Alfen Beheer and Fastned BV into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Alfen Beheer and Fastned BV

-0.11

Correlation Coefficient

Alfen Beheer  Fastned BV

Good diversification

The 3 months correlation between Alfen and Fastned is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Alfen Beheer BV and Fastned BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastned BV and Alfen Beheer 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 Alfen Beheer BV are associated (or correlated) with Fastned BV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastned BV has no effect on the direction of Alfen Beheer i.e., Alfen Beheer and Fastned BV go up and down completely randomly.

Pair Corralation between Alfen Beheer and Fastned BV

Assuming the 90 days trading horizon Alfen Beheer BV is expected to under-perform the Fastned BV. In addition to that, Alfen Beheer is 1.64 times more volatile than Fastned BV. It trades about -0.01 of its total potential returns per unit of risk. Fastned BV is currently generating about 0.09 per unit of volatility. If you would invest  1,896  in Fastned BV on September 19, 2024 and sell it today you would earn a total of  254.00  from holding Fastned BV or generate 13.4% return on investment over 90 days.

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

Alfen Beheer BV  vs.  Fastned BV

Alfen Beheer BV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alfen Beheer BV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Alfen Beheer is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Fastned BV

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with Alfen Beheer and Fastned BV

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

The idea behind Alfen Beheer BV and Fastned BV 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.