Correlation Between Alfen Beheer and PostNL NV

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

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

Diversification Opportunities for Alfen Beheer and PostNL NV

-0.22

Correlation Coefficient

Alfen Beheer  PostNL NV

Very good diversification

The 3 months correlation between Alfen and PostNL is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Alfen Beheer BV and PostNL NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PostNL NV and Alfen Beheer 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 Alfen Beheer BV are associated (or correlated) with PostNL NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PostNL NV has no effect on the direction of Alfen Beheer i.e., Alfen Beheer and PostNL NV go up and down completely randomly.

Pair Corralation between Alfen Beheer and PostNL NV

Assuming the 90 days trading horizon Alfen Beheer BV is expected to generate 1.89 times more return on investment than PostNL NV. However, Alfen Beheer is 1.89 times more volatile than PostNL NV. It trades about 0.06 of its potential returns per unit of risk. PostNL NV is currently generating about -0.03 per unit of risk. If you would invest  1,167  in Alfen Beheer BV on December 30, 2024 and sell it today you would earn a total of  112.00  from holding Alfen Beheer BV or generate 9.6% return on investment over 90 days.

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

Alfen Beheer BV  vs.  PostNL NV

Alfen Beheer BV

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alfen Beheer BV are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Alfen Beheer sustained solid returns over the last few months and may actually be approaching a breakup point.

PostNL NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days PostNL NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, PostNL NV is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Alfen Beheer and PostNL NV

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

The idea behind Alfen Beheer BV and PostNL 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.

Check out your portfolio center.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.