Correlation Between ABN Amro and Fastned BV

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

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

Diversification Opportunities for ABN Amro and Fastned BV

0.77

Correlation Coefficient

ABN Amro  Fastned BV

Poor diversification

The 3 months correlation between ABN and Fastned is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding ABN Amro Group and Fastned BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastned BV and ABN Amro 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 ABN Amro Group 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 ABN Amro i.e., ABN Amro and Fastned BV go up and down completely randomly.

Pair Corralation between ABN Amro and Fastned BV

Assuming the 90 days trading horizon ABN Amro Group is expected to generate 0.5 times more return on investment than Fastned BV. However, ABN Amro Group is 2.01 times less risky than Fastned BV. It trades about 0.37 of its potential returns per unit of risk. Fastned BV is currently generating about 0.11 per unit of risk. If you would invest  1,731  in ABN Amro Group on April 20, 2025 and sell it today you would earn a total of  686.00  from holding ABN Amro Group or generate 39.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

ABN Amro Group  vs.  Fastned BV

ABN Amro Group

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in ABN Amro Group are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ABN Amro unveiled solid returns over the last few months and may actually be approaching a breakup point.

Fastned BV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fastned BV are ranked lower than 8 (%) 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 ABN Amro and Fastned BV

The main advantage of trading using opposite ABN Amro and Fastned BV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABN Amro 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 ABN Amro Group 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.