Correlation Between Fastned BV and Alfen Beheer

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

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

Diversification Opportunities for Fastned BV and Alfen Beheer

-0.43

Correlation Coefficient

Fastned BV  Alfen Beheer

Very good diversification

The 3 months correlation between Fastned and Alfen is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Fastned BV and Alfen Beheer BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfen Beheer BV and Fastned BV 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 Fastned BV are associated (or correlated) with Alfen Beheer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfen Beheer BV has no effect on the direction of Fastned BV i.e., Fastned BV and Alfen Beheer go up and down completely randomly.

Pair Corralation between Fastned BV and Alfen Beheer

Assuming the 90 days trading horizon Fastned BV is expected to generate 0.67 times more return on investment than Alfen Beheer. However, Fastned BV is 1.5 times less risky than Alfen Beheer. It trades about 0.1 of its potential returns per unit of risk. Alfen Beheer BV is currently generating about -0.04 per unit of risk. If you would invest  1,886  in Fastned BV on April 22, 2025 and sell it today you would earn a total of  344.00  from holding Fastned BV or generate 18.24% return on investment over 90 days.

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

Fastned BV  vs.  Alfen Beheer BV

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.

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.

Pair Trading with Fastned BV and Alfen Beheer

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

The idea behind Fastned BV and Alfen Beheer 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.