Correlation Between Alabama Aircraft and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Alabama Aircraft and Aegon 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 Alabama Aircraft and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alabama Aircraft Industries and Aegon NV ADR, you can compare the effects of market volatilities on Alabama Aircraft and Aegon 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 Alabama Aircraft with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alabama Aircraft and Aegon NV.
Diversification Opportunities for Alabama Aircraft and Aegon NV
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alabama and Aegon is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Alabama Aircraft Industries and Aegon NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV ADR and Alabama Aircraft 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 Alabama Aircraft Industries are associated (or correlated) with Aegon NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon NV ADR has no effect on the direction of Alabama Aircraft i.e., Alabama Aircraft and Aegon NV go up and down completely randomly.
Pair Corralation between Alabama Aircraft and Aegon NV
If you would invest 0.01 in Alabama Aircraft Industries on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Alabama Aircraft Industries or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Alabama Aircraft Industries vs. Aegon NV ADR
Performance |
| Timeline |
| Alabama Aircraft Ind |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Aegon NV ADR |
Alabama Aircraft and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alabama Aircraft and Aegon NV
The main advantage of trading using opposite Alabama Aircraft and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alabama Aircraft position performs unexpectedly, Aegon 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 Aegon NV will offset losses from the drop in Aegon NV's long position.| Alabama Aircraft vs. Aegon NV ADR | Alabama Aircraft vs. Lindblad Expeditions Holdings | Alabama Aircraft vs. MGIC Investment Corp | Alabama Aircraft vs. Cincinnati Financial |
| Aegon NV vs. Hartford Financial Services | Aegon NV vs. Goosehead Insurance | Aegon NV vs. International General Insurance | Aegon NV vs. Enstar Group Limited |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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