Correlation Between Adams Resources and Aegon Funding
Can any of the company-specific risk be diversified away by investing in both Adams Resources and Aegon Funding 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 Adams Resources and Aegon Funding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Resources Energy and Aegon Funding, you can compare the effects of market volatilities on Adams Resources and Aegon Funding 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 Adams Resources with a short position of Aegon Funding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Resources and Aegon Funding.
Diversification Opportunities for Adams Resources and Aegon Funding
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Adams and Aegon is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Adams Resources Energy and Aegon Funding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon Funding and Adams Resources 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 Adams Resources Energy are associated (or correlated) with Aegon Funding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon Funding has no effect on the direction of Adams Resources i.e., Adams Resources and Aegon Funding go up and down completely randomly.
Pair Corralation between Adams Resources and Aegon Funding
Allowing for the 90-day total investment horizon Adams Resources Energy is expected to generate 3.23 times more return on investment than Aegon Funding. However, Adams Resources is 3.23 times more volatile than Aegon Funding. It trades about 0.02 of its potential returns per unit of risk. Aegon Funding is currently generating about 0.03 per unit of risk. If you would invest 3,373 in Adams Resources Energy on August 31, 2024 and sell it today you would earn a total of 349.00 from holding Adams Resources Energy or generate 10.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adams Resources Energy vs. Aegon Funding
Performance |
| Timeline |
| Adams Resources Energy |
| Aegon Funding |
Adams Resources and Aegon Funding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adams Resources and Aegon Funding
The main advantage of trading using opposite Adams Resources and Aegon Funding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Resources position performs unexpectedly, Aegon Funding 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 Funding will offset losses from the drop in Aegon Funding's long position.| Adams Resources vs. PrimeEnergy | Adams Resources vs. Barnwell Industries | Adams Resources vs. Acme United | Adams Resources vs. CKX Lands |
| Aegon Funding vs. Petroleo Brasileiro Petrobras | Aegon Funding vs. Equinor ASA ADR | Aegon Funding vs. Eni SpA ADR | Aegon Funding vs. YPF Sociedad Anonima |
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 CEOs Directory module to screen CEOs from public companies around the world.
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