Correlation Between Alfen Beheer and Pharming Group
Can any of the company-specific risk be diversified away by investing in both Alfen Beheer and Pharming 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 Alfen Beheer and Pharming Group 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 Pharming Group NV, you can compare the effects of market volatilities on Alfen Beheer and Pharming 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 Alfen Beheer with a short position of Pharming Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfen Beheer and Pharming Group.
Diversification Opportunities for Alfen Beheer and Pharming Group
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alfen and Pharming is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Alfen Beheer BV and Pharming Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharming Group NV 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 Pharming Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharming Group NV has no effect on the direction of Alfen Beheer i.e., Alfen Beheer and Pharming Group go up and down completely randomly.
Pair Corralation between Alfen Beheer and Pharming Group
Assuming the 90 days trading horizon Alfen Beheer BV is expected to under-perform the Pharming Group. In addition to that, Alfen Beheer is 1.25 times more volatile than Pharming Group NV. It trades about -0.01 of its total potential returns per unit of risk. Pharming Group NV is currently generating about 0.09 per unit of volatility. If you would invest 71.00 in Pharming Group NV on September 19, 2024 and sell it today you would earn a total of 12.00 from holding Pharming Group NV or generate 16.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Alfen Beheer BV vs. Pharming Group NV
Performance |
Timeline |
Alfen Beheer BV |
Pharming Group NV |
Alfen Beheer and Pharming Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alfen Beheer and Pharming Group
The main advantage of trading using opposite Alfen Beheer and Pharming Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfen Beheer position performs unexpectedly, Pharming 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 Pharming Group will offset losses from the drop in Pharming Group's long position.Alfen Beheer vs. Akzo Nobel NV | Alfen Beheer vs. Koninklijke KPN NV | Alfen Beheer vs. Aegon NV | Alfen Beheer vs. Wolters Kluwer NV |
Pharming Group vs. Galapagos NV | Pharming Group vs. Koninklijke BAM Groep | Pharming Group vs. Fugro NV | Pharming Group vs. PostNL NV |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Global Correlations Find global opportunities by holding instruments from different markets |