Correlation Between Fugro NV and Randstad

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

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

Diversification Opportunities for Fugro NV and Randstad

0.9

Correlation Coefficient

Fugro NV  Randstad

Almost no diversification

The 3 months correlation between Fugro and Randstad is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Fugro NV and Randstad NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Randstad NV and Fugro 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 Fugro NV are associated (or correlated) with Randstad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Randstad NV has no effect on the direction of Fugro NV i.e., Fugro NV and Randstad go up and down completely randomly.

Pair Corralation between Fugro NV and Randstad

Assuming the 90 days trading horizon Fugro NV is expected to generate 1.07 times more return on investment than Randstad. However, Fugro NV is 1.07 times more volatile than Randstad NV. It trades about 0.19 of its potential returns per unit of risk. Randstad NV is currently generating about 0.16 per unit of risk. If you would invest  1,030  in Fugro NV on April 24, 2025 and sell it today you would earn a total of  226.00  from holding Fugro NV or generate 21.94% return on investment over 90 days.

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

Fugro NV  vs.  Randstad NV

Fugro NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fugro NV are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fugro NV unveiled solid returns over the last few months and may actually be approaching a breakup point.

Randstad NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Randstad NV are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Randstad unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fugro NV and Randstad

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

The idea behind Fugro NV and Randstad 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.