Correlation Between Shell PLC and Alfen Beheer

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

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

Diversification Opportunities for Shell PLC and Alfen Beheer

-0.69

Correlation Coefficient

Shell PLC  Alfen Beheer

Excellent diversification

The 3 months correlation between Shell and Alfen is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shell PLC 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 Shell PLC 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 Shell PLC 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 Shell PLC i.e., Shell PLC and Alfen Beheer go up and down completely randomly.

Pair Corralation between Shell PLC and Alfen Beheer

Assuming the 90 days trading horizon Shell PLC is expected to generate 0.25 times more return on investment than Alfen Beheer. However, Shell PLC is 4.03 times less risky than Alfen Beheer. It trades about 0.11 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  2,824  in Shell PLC on April 22, 2025 and sell it today you would earn a total of  216.00  from holding Shell PLC or generate 7.65% return on investment over 90 days.

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

Shell PLC  vs.  Alfen Beheer BV

Shell PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shell PLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Shell PLC may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 Shell PLC and Alfen Beheer

The main advantage of trading using opposite Shell PLC and Alfen Beheer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shell PLC 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 Shell PLC 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.