Correlation Between Aegon NV and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both Aegon NV and CapitaLand Investment 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 CapitaLand Investment 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 CapitaLand Investment Limited, you can compare the effects of market volatilities on Aegon NV and CapitaLand Investment 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 CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and CapitaLand Investment.
Diversification Opportunities for Aegon NV and CapitaLand Investment
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aegon and CapitaLand is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment 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 CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of Aegon NV i.e., Aegon NV and CapitaLand Investment go up and down completely randomly.
Pair Corralation between Aegon NV and CapitaLand Investment
Considering the 90-day investment horizon Aegon NV is expected to generate 1.15 times less return on investment than CapitaLand Investment. But when comparing it to its historical volatility, Aegon NV ADR is 3.71 times less risky than CapitaLand Investment. It trades about 0.07 of its potential returns per unit of risk. CapitaLand Investment Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 193.00 in CapitaLand Investment Limited on September 2, 2024 and sell it today you would lose (11.00) from holding CapitaLand Investment Limited or give up 5.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. CapitaLand Investment Limited
Performance |
| Timeline |
| Aegon NV ADR |
| CapitaLand Investment |
Aegon NV and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and CapitaLand Investment
The main advantage of trading using opposite Aegon NV and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, CapitaLand Investment 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 CapitaLand Investment will offset losses from the drop in CapitaLand Investment'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 |
| CapitaLand Investment vs. IRSA Inversiones Y | CapitaLand Investment vs. Anywhere Real Estate | CapitaLand Investment vs. Newmark Group | CapitaLand Investment vs. New York City |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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