Correlation Between Aegon Funding and QVCC
Can any of the company-specific risk be diversified away by investing in both Aegon Funding and QVCC 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 QVCC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegon Funding and QVCC, you can compare the effects of market volatilities on Aegon Funding and QVCC 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 QVCC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon Funding and QVCC.
Diversification Opportunities for Aegon Funding and QVCC
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aegon and QVCC is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Aegon Funding and QVCC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QVCC 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 QVCC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QVCC has no effect on the direction of Aegon Funding i.e., Aegon Funding and QVCC go up and down completely randomly.
Pair Corralation between Aegon Funding and QVCC
Given the investment horizon of 90 days Aegon Funding is expected to generate 6.69 times less return on investment than QVCC. But when comparing it to its historical volatility, Aegon Funding is 2.66 times less risky than QVCC. It trades about 0.02 of its potential returns per unit of risk. QVCC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,100 in QVCC on August 28, 2024 and sell it today you would earn a total of 202.00 from holding QVCC or generate 18.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon Funding vs. QVCC
Performance |
| Timeline |
| Aegon Funding |
| QVCC |
Aegon Funding and QVCC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon Funding and QVCC
The main advantage of trading using opposite Aegon Funding and QVCC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon Funding position performs unexpectedly, QVCC 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 QVCC will offset losses from the drop in QVCC's long position.| Aegon Funding vs. Diamond Estates Wines | Aegon Funding vs. Keurig Dr Pepper | Aegon Funding vs. Valneva SE ADR | Aegon Funding vs. National Beverage Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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