Correlation Between Alfen Beheer and NedSense Enterprises

Can any of the company-specific risk be diversified away by investing in both Alfen Beheer and NedSense Enterprises 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 NedSense Enterprises 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 NedSense Enterprises NV, you can compare the effects of market volatilities on Alfen Beheer and NedSense Enterprises 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 NedSense Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfen Beheer and NedSense Enterprises.

Diversification Opportunities for Alfen Beheer and NedSense Enterprises

-0.56

Correlation Coefficient

Alfen Beheer  NedSense Enterprises

Excellent diversification

The 3 months correlation between Alfen and NedSense is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Alfen Beheer BV and NedSense Enterprises NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NedSense Enterprises 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 NedSense Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NedSense Enterprises has no effect on the direction of Alfen Beheer i.e., Alfen Beheer and NedSense Enterprises go up and down completely randomly.

Pair Corralation between Alfen Beheer and NedSense Enterprises

Assuming the 90 days trading horizon Alfen Beheer BV is expected to under-perform the NedSense Enterprises. In addition to that, Alfen Beheer is 1.38 times more volatile than NedSense Enterprises NV. It trades about -0.04 of its total potential returns per unit of risk. NedSense Enterprises NV is currently generating about 0.26 per unit of volatility. If you would invest  5.80  in NedSense Enterprises NV on April 22, 2025 and sell it today you would earn a total of  3.70  from holding NedSense Enterprises NV or generate 63.79% return on investment over 90 days.

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

Alfen Beheer BV  vs.  NedSense Enterprises NV

Alfen Beheer BV

Risk-Adjusted Performance

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 latest uncertain 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.

NedSense Enterprises

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NedSense Enterprises NV are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, NedSense Enterprises sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alfen Beheer and NedSense Enterprises

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

The idea behind Alfen Beheer BV and NedSense Enterprises 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.