Correlation Between Randstad and Fugro NV

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

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

Diversification Opportunities for Randstad and Fugro NV

0.9

Correlation Coefficient

Randstad  Fugro NV

Almost no diversification

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

Pair Corralation between Randstad and Fugro NV

Assuming the 90 days trading horizon Randstad is expected to generate 1.16 times less return on investment than Fugro NV. But when comparing it to its historical volatility, Randstad NV is 1.06 times less risky than Fugro NV. It trades about 0.16 of its potential returns per unit of risk. Fugro NV is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,054  in Fugro NV on April 25, 2025 and sell it today you would earn a total of  202.00  from holding Fugro NV or generate 19.17% return on investment over 90 days.

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

Randstad NV  vs.  Fugro NV

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.

Fugro NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fugro NV are ranked lower than 13 (%) 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.

Pair Trading with Randstad and Fugro NV

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

The idea behind Randstad NV and Fugro 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.