Correlation Between Aegon Funding and SNDL
Can any of the company-specific risk be diversified away by investing in both Aegon Funding and SNDL 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 SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegon Funding and SNDL Inc, you can compare the effects of market volatilities on Aegon Funding and SNDL 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 SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon Funding and SNDL.
Diversification Opportunities for Aegon Funding and SNDL
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aegon and SNDL is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Aegon Funding and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc 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 SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of Aegon Funding i.e., Aegon Funding and SNDL go up and down completely randomly.
Pair Corralation between Aegon Funding and SNDL
Given the investment horizon of 90 days Aegon Funding is expected to generate 0.8 times more return on investment than SNDL. However, Aegon Funding is 1.25 times less risky than SNDL. It trades about -0.06 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.28 per unit of risk. If you would invest 2,148 in Aegon Funding on September 12, 2024 and sell it today you would lose (28.00) from holding Aegon Funding or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon Funding vs. SNDL Inc
Performance |
| Timeline |
| Aegon Funding |
| SNDL Inc |
Aegon Funding and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon Funding and SNDL
The main advantage of trading using opposite Aegon Funding and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon Funding position performs unexpectedly, SNDL 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 SNDL will offset losses from the drop in SNDL's long position.| Aegon Funding vs. SNDL Inc | Aegon Funding vs. SunOpta | Aegon Funding vs. Bridgford Foods | Aegon Funding vs. Hf Foods Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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