Correlation Between Aegon NV and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Fidus 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 Fidus 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 Fidus Investment Corp, you can compare the effects of market volatilities on Aegon NV and Fidus 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 Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Fidus Investment.
Diversification Opportunities for Aegon NV and Fidus Investment
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aegon and Fidus is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Fidus Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidus Investment Corp 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 Fidus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidus Investment Corp has no effect on the direction of Aegon NV i.e., Aegon NV and Fidus Investment go up and down completely randomly.
Pair Corralation between Aegon NV and Fidus Investment
Considering the 90-day investment horizon Aegon NV ADR is expected to under-perform the Fidus Investment. In addition to that, Aegon NV is 1.85 times more volatile than Fidus Investment Corp. It trades about -0.03 of its total potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.44 per unit of volatility. If you would invest 1,951 in Fidus Investment Corp on August 30, 2024 and sell it today you would earn a total of 157.00 from holding Fidus Investment Corp or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. Fidus Investment Corp
Performance |
| Timeline |
| Aegon NV ADR |
| Fidus Investment Corp |
Aegon NV and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Fidus Investment
The main advantage of trading using opposite Aegon NV and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Fidus 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 Fidus Investment will offset losses from the drop in Fidus 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 |
| Fidus Investment vs. Golub Capital BDC | Fidus Investment vs. BlackRock TCP Capital | Fidus Investment vs. Carlyle Secured Lending | Fidus Investment vs. Sixth Street Specialty |
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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