Correlation Between Aegon NV and B Communications
Can any of the company-specific risk be diversified away by investing in both Aegon NV and B Communications 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 B Communications 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 B Communications, you can compare the effects of market volatilities on Aegon NV and B Communications 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 B Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and B Communications.
Diversification Opportunities for Aegon NV and B Communications
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aegon and BCOMF is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and B Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Communications 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 B Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Communications has no effect on the direction of Aegon NV i.e., Aegon NV and B Communications go up and down completely randomly.
Pair Corralation between Aegon NV and B Communications
Considering the 90-day investment horizon Aegon NV ADR is expected to generate 1.14 times more return on investment than B Communications. However, Aegon NV is 1.14 times more volatile than B Communications. It trades about 0.06 of its potential returns per unit of risk. B Communications is currently generating about -0.27 per unit of risk. If you would invest 436.00 in Aegon NV ADR on September 2, 2024 and sell it today you would earn a total of 213.00 from holding Aegon NV ADR or generate 48.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 8.27% |
| Values | Daily Returns |
Aegon NV ADR vs. B Communications
Performance |
| Timeline |
| Aegon NV ADR |
| B Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aegon NV and B Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and B Communications
The main advantage of trading using opposite Aegon NV and B Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, B Communications 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 B Communications will offset losses from the drop in B Communications' 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 |
| B Communications vs. Merit Medical Systems | B Communications vs. National Vision Holdings | B Communications vs. Grocery Outlet Holding | B Communications vs. The Joint 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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