Correlation Between Aegon NV and Global Technology
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Global Technology 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 Global Technology 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 Global Technology Acquisition, you can compare the effects of market volatilities on Aegon NV and Global Technology 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 Global Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Global Technology.
Diversification Opportunities for Aegon NV and Global Technology
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aegon and Global is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Global Technology Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Technology 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 Global Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Technology has no effect on the direction of Aegon NV i.e., Aegon NV and Global Technology go up and down completely randomly.
Pair Corralation between Aegon NV and Global Technology
Considering the 90-day investment horizon Aegon NV ADR is expected to generate 1.72 times more return on investment than Global Technology. However, Aegon NV is 1.72 times more volatile than Global Technology Acquisition. It trades about 0.06 of its potential returns per unit of risk. Global Technology Acquisition is currently generating about 0.03 per unit of risk. If you would invest 431.00 in Aegon NV ADR on September 5, 2024 and sell it today you would earn a total of 210.00 from holding Aegon NV ADR or generate 48.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.94% |
| Values | Daily Returns |
Aegon NV ADR vs. Global Technology Acquisition
Performance |
| Timeline |
| Aegon NV ADR |
| Global Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Aegon NV and Global Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Global Technology
The main advantage of trading using opposite Aegon NV and Global Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Global Technology 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 Global Technology will offset losses from the drop in Global Technology's long position.| Aegon NV vs. Goosehead Insurance | Aegon NV vs. Enstar Group Limited | Aegon NV vs. American International Group | Aegon NV vs. Sun Life Financial |
| Global Technology vs. Aegon NV ADR | Global Technology vs. Hurco Companies | Global Technology vs. Ecoloclean Industrs | Global Technology vs. ChampionX |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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