Correlation Between Aegon Funding and Diamond Estates
Can any of the company-specific risk be diversified away by investing in both Aegon Funding and Diamond Estates 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 Aegon Funding and Diamond Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegon Funding and Diamond Estates Wines, you can compare the effects of market volatilities on Aegon Funding and Diamond Estates 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 Aegon Funding with a short position of Diamond Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon Funding and Diamond Estates.
Diversification Opportunities for Aegon Funding and Diamond Estates
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aegon and Diamond is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aegon Funding and Diamond Estates Wines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Estates Wines and Aegon Funding 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 Aegon Funding are associated (or correlated) with Diamond Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Estates Wines has no effect on the direction of Aegon Funding i.e., Aegon Funding and Diamond Estates go up and down completely randomly.
Pair Corralation between Aegon Funding and Diamond Estates
Given the investment horizon of 90 days Aegon Funding is expected to generate 0.19 times more return on investment than Diamond Estates. However, Aegon Funding is 5.14 times less risky than Diamond Estates. It trades about 0.03 of its potential returns per unit of risk. Diamond Estates Wines is currently generating about -0.07 per unit of risk. If you would invest 2,008 in Aegon Funding on August 31, 2024 and sell it today you would earn a total of 171.00 from holding Aegon Funding or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Aegon Funding vs. Diamond Estates Wines
Performance |
| Timeline |
| Aegon Funding |
| Diamond Estates Wines |
Aegon Funding and Diamond Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon Funding and Diamond Estates
The main advantage of trading using opposite Aegon Funding and Diamond Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon Funding position performs unexpectedly, Diamond Estates 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 Diamond Estates will offset losses from the drop in Diamond Estates' long position.| Aegon Funding vs. Petroleo Brasileiro Petrobras | Aegon Funding vs. Equinor ASA ADR | Aegon Funding vs. Eni SpA ADR | Aegon Funding vs. YPF Sociedad Anonima |
| Diamond Estates vs. Signet International Holdings | Diamond Estates vs. National Beverage Corp | Diamond Estates vs. PT Astra International | Diamond Estates vs. Vita Coco |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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