Correlation Between RENEWI and Alfen Beheer

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

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

Diversification Opportunities for RENEWI and Alfen Beheer

0.5

Correlation Coefficient

RENEWI  Alfen Beheer

Very weak diversification

The 3 months correlation between RENEWI and Alfen is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding RENEWI 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 RENEWI 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 RENEWI 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 RENEWI i.e., RENEWI and Alfen Beheer go up and down completely randomly.

Pair Corralation between RENEWI and Alfen Beheer

Assuming the 90 days trading horizon RENEWI is expected to under-perform the Alfen Beheer. In addition to that, RENEWI is 2.94 times more volatile than Alfen Beheer BV. It trades about -0.14 of its total potential returns per unit of risk. Alfen Beheer BV is currently generating about -0.04 per unit of volatility. If you would invest  1,286  in Alfen Beheer BV on April 22, 2025 and sell it today you would lose (203.00) from holding Alfen Beheer BV or give up 15.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

RENEWI  vs.  Alfen Beheer BV

RENEWI

Risk-Adjusted Performance

OK

Over the last 90 days RENEWI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 RENEWI and Alfen Beheer

The main advantage of trading using opposite RENEWI and Alfen Beheer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RENEWI 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 RENEWI 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.