Correlation Between Arch Capital and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Arch Capital 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 Arch Capital and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arch Capital Group and Aegon NV ADR, you can compare the effects of market volatilities on Arch Capital 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 Arch Capital with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arch Capital and Aegon NV.
Diversification Opportunities for Arch Capital and Aegon NV
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arch and Aegon is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Arch Capital Group 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 Arch Capital 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 Arch Capital Group 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 Arch Capital i.e., Arch Capital and Aegon NV go up and down completely randomly.
Pair Corralation between Arch Capital and Aegon NV
Given the investment horizon of 90 days Arch Capital Group is expected to generate 0.97 times more return on investment than Aegon NV. However, Arch Capital Group is 1.03 times less risky than Aegon NV. It trades about 0.07 of its potential returns per unit of risk. Aegon NV ADR is currently generating about 0.04 per unit of risk. If you would invest 7,620 in Arch Capital Group on October 20, 2024 and sell it today you would earn a total of 1,931 from holding Arch Capital Group or generate 25.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arch Capital Group vs. Aegon NV ADR
Performance |
| Timeline |
| Arch Capital Group |
| Aegon NV ADR |
Arch Capital and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arch Capital and Aegon NV
The main advantage of trading using opposite Arch Capital and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arch Capital 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.| Arch Capital vs. Axa Equitable Holdings | Arch Capital vs. American International Group | Arch Capital vs. Old Republic International | Arch Capital vs. Sun Life 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |