Correlation Between Galapagos and Fastned BV

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

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

Diversification Opportunities for Galapagos and Fastned BV

0.4

Correlation Coefficient

Galapagos  Fastned BV

Very weak diversification

The 3 months correlation between Galapagos and Fastned is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Galapagos NV and Fastned BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastned BV and Galapagos 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 Galapagos 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 Galapagos i.e., Galapagos and Fastned BV go up and down completely randomly.

Pair Corralation between Galapagos and Fastned BV

Assuming the 90 days trading horizon Galapagos NV is expected to generate 0.54 times more return on investment than Fastned BV. However, Galapagos NV is 1.87 times less risky than Fastned BV. It trades about 0.21 of its potential returns per unit of risk. Fastned BV is currently generating about 0.11 per unit of risk. If you would invest  2,204  in Galapagos NV on April 22, 2025 and sell it today you would earn a total of  484.00  from holding Galapagos NV or generate 21.96% return on investment over 90 days.

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

Galapagos NV  vs.  Fastned BV

Galapagos NV

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Galapagos NV are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Galapagos 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 Galapagos and Fastned BV

The main advantage of trading using opposite Galapagos and Fastned BV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galapagos 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 Galapagos 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.