Correlation Between Aegon NV and Codexis
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Codexis 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 Codexis 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 Codexis, you can compare the effects of market volatilities on Aegon NV and Codexis 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 Codexis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Codexis.
Diversification Opportunities for Aegon NV and Codexis
Very weak diversification
The 3 months correlation between Aegon and Codexis is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis 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 Codexis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Codexis has no effect on the direction of Aegon NV i.e., Aegon NV and Codexis go up and down completely randomly.
Pair Corralation between Aegon NV and Codexis
Considering the 90-day investment horizon Aegon NV is expected to generate 1.18 times less return on investment than Codexis. But when comparing it to its historical volatility, Aegon NV ADR is 3.43 times less risky than Codexis. It trades about 0.06 of its potential returns per unit of risk. Codexis is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 552.00 in Codexis on September 3, 2024 and sell it today you would lose (94.00) from holding Codexis or give up 17.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. Codexis
Performance |
| Timeline |
| Aegon NV ADR |
| Codexis |
Aegon NV and Codexis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Codexis
The main advantage of trading using opposite Aegon NV and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Codexis 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 Codexis will offset losses from the drop in Codexis' long position.| Aegon NV vs. Global Indemnity PLC | Aegon NV vs. Erie Indemnity | Aegon NV vs. AMERISAFE | Aegon NV vs. Diamond Hill Investment |
| Codexis vs. Nuvation Bio | Codexis vs. Lyell Immunopharma | Codexis vs. Century Therapeutics | Codexis vs. Generation Bio Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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