Correlation Between PostNL NV and Fastned BV

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

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

Diversification Opportunities for PostNL NV and Fastned BV

-0.56

Correlation Coefficient

PostNL NV  Fastned BV

Excellent diversification

The 3 months correlation between PostNL and Fastned is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding PostNL NV and Fastned BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastned BV and PostNL 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 PostNL NV 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 PostNL NV i.e., PostNL NV and Fastned BV go up and down completely randomly.

Pair Corralation between PostNL NV and Fastned BV

Assuming the 90 days trading horizon PostNL NV is expected to under-perform the Fastned BV. But the stock apears to be less risky and, when comparing its historical volatility, PostNL NV is 1.43 times less risky than Fastned BV. The stock trades about -0.16 of its potential returns per unit of risk. The Fastned BV is currently generating about 0.09 of returns per unit of risk over similar time horizon. 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

PostNL NV  vs.  Fastned BV

PostNL NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PostNL NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private 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 PostNL NV and Fastned BV

The main advantage of trading using opposite PostNL NV and Fastned BV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PostNL NV 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 PostNL NV 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.