Correlation Between Aegon NV and Freedom Holding
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Freedom Holding 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 Freedom Holding 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 Freedom Holding Corp, you can compare the effects of market volatilities on Aegon NV and Freedom Holding 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 Freedom Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Freedom Holding.
Diversification Opportunities for Aegon NV and Freedom Holding
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aegon and Freedom is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Freedom Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Holding 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 Freedom Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Holding Corp has no effect on the direction of Aegon NV i.e., Aegon NV and Freedom Holding go up and down completely randomly.
Pair Corralation between Aegon NV and Freedom Holding
Considering the 90-day investment horizon Aegon NV ADR is expected to under-perform the Freedom Holding. But the stock apears to be less risky and, when comparing its historical volatility, Aegon NV ADR is 1.14 times less risky than Freedom Holding. The stock trades about -0.19 of its potential returns per unit of risk. The Freedom Holding Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 13,483 in Freedom Holding Corp on November 27, 2024 and sell it today you would earn a total of 1,100 from holding Freedom Holding Corp or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. Freedom Holding Corp
Performance |
| Timeline |
| Aegon NV ADR |
| Freedom Holding Corp |
Aegon NV and Freedom Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Freedom Holding
The main advantage of trading using opposite Aegon NV and Freedom Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Freedom Holding 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 Freedom Holding will offset losses from the drop in Freedom Holding'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 |
| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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