Correlation Between Aegon NV and Atlantic American
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Atlantic American 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 NV and Atlantic American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegon NV ADR and Atlantic American, you can compare the effects of market volatilities on Aegon NV and Atlantic American 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 NV with a short position of Atlantic American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Atlantic American.
Diversification Opportunities for Aegon NV and Atlantic American
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aegon and Atlantic is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Atlantic American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic American and Aegon NV 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 NV ADR are associated (or correlated) with Atlantic American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic American has no effect on the direction of Aegon NV i.e., Aegon NV and Atlantic American go up and down completely randomly.
Pair Corralation between Aegon NV and Atlantic American
Considering the 90-day investment horizon Aegon NV is expected to generate 1.9 times less return on investment than Atlantic American. But when comparing it to its historical volatility, Aegon NV ADR is 2.93 times less risky than Atlantic American. It trades about 0.22 of its potential returns per unit of risk. Atlantic American is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 148.00 in Atlantic American on November 18, 2024 and sell it today you would earn a total of 12.00 from holding Atlantic American or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. Atlantic American
Performance |
| Timeline |
| Aegon NV ADR |
| Atlantic American |
Aegon NV and Atlantic American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Atlantic American
The main advantage of trading using opposite Aegon NV and Atlantic American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Atlantic American 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 Atlantic American will offset losses from the drop in Atlantic American's long position.| Aegon NV vs. Hartford Financial Services | Aegon NV vs. Goosehead Insurance | Aegon NV vs. International General Insurance | Aegon NV vs. Enstar Group Limited |
| Atlantic American vs. CNO Financial Group | Atlantic American vs. MetLife Preferred Stock | Atlantic American vs. FG Annuities Life | Atlantic American vs. Prudential PLC ADR |
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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