Correlation Between Aegon NV and Fidelis Insurance
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Fidelis Insurance 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 Fidelis Insurance 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 Fidelis Insurance Holdings, you can compare the effects of market volatilities on Aegon NV and Fidelis Insurance 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 Fidelis Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Fidelis Insurance.
Diversification Opportunities for Aegon NV and Fidelis Insurance
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aegon and Fidelis is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Fidelis Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelis Insurance 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 Fidelis Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelis Insurance has no effect on the direction of Aegon NV i.e., Aegon NV and Fidelis Insurance go up and down completely randomly.
Pair Corralation between Aegon NV and Fidelis Insurance
Considering the 90-day investment horizon Aegon NV ADR is expected to under-perform the Fidelis Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Aegon NV ADR is 1.57 times less risky than Fidelis Insurance. The stock trades about -0.06 of its potential returns per unit of risk. The Fidelis Insurance Holdings is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,742 in Fidelis Insurance Holdings on August 24, 2024 and sell it today you would earn a total of 311.00 from holding Fidelis Insurance Holdings or generate 17.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. Fidelis Insurance Holdings
Performance |
| Timeline |
| Aegon NV ADR |
| Fidelis Insurance |
Aegon NV and Fidelis Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Fidelis Insurance
The main advantage of trading using opposite Aegon NV and Fidelis Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Fidelis Insurance 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 Fidelis Insurance will offset losses from the drop in Fidelis Insurance'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 |
| Fidelis Insurance vs. RBC Bearings Incorporated | Fidelis Insurance vs. EMCOR Group | Fidelis Insurance vs. CECO Environmental Corp | Fidelis Insurance vs. Everus Construction Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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