Correlation Between Aegon Funding and Southern
Can any of the company-specific risk be diversified away by investing in both Aegon Funding and Southern 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 Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegon Funding and Southern Co, you can compare the effects of market volatilities on Aegon Funding and Southern 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 Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon Funding and Southern.
Diversification Opportunities for Aegon Funding and Southern
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aegon and Southern is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Aegon Funding and Southern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern 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 Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern has no effect on the direction of Aegon Funding i.e., Aegon Funding and Southern go up and down completely randomly.
Pair Corralation between Aegon Funding and Southern
Given the investment horizon of 90 days Aegon Funding is expected to under-perform the Southern. In addition to that, Aegon Funding is 1.24 times more volatile than Southern Co. It trades about -0.04 of its total potential returns per unit of risk. Southern Co is currently generating about -0.04 per unit of volatility. If you would invest 2,099 in Southern Co on November 3, 2024 and sell it today you would lose (23.00) from holding Southern Co or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aegon Funding vs. Southern Co
Performance |
| Timeline |
| Aegon Funding |
| Southern |
Aegon Funding and Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon Funding and Southern
The main advantage of trading using opposite Aegon Funding and Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon Funding position performs unexpectedly, Southern 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 Southern will offset losses from the drop in Southern's long position.| Aegon Funding vs. PennantPark Floating Rate | Aegon Funding vs. Perella Weinberg Partners | Aegon Funding vs. NorthWestern | Aegon Funding vs. Canaf Investments |
| Southern vs. Southern Co | Southern vs. Southern Company Series | Southern vs. ATT Inc | Southern vs. Aegon Funding |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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