Correlation Between Aegon NV and Hudson Technologies
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Hudson Technologies 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 Hudson Technologies 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 Hudson Technologies, you can compare the effects of market volatilities on Aegon NV and Hudson Technologies 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 Hudson Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Hudson Technologies.
Diversification Opportunities for Aegon NV and Hudson Technologies
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aegon and Hudson is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Hudson Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Technologies 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 Hudson Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Technologies has no effect on the direction of Aegon NV i.e., Aegon NV and Hudson Technologies go up and down completely randomly.
Pair Corralation between Aegon NV and Hudson Technologies
Considering the 90-day investment horizon Aegon NV ADR is expected to generate 0.53 times more return on investment than Hudson Technologies. However, Aegon NV ADR is 1.9 times less risky than Hudson Technologies. It trades about 0.06 of its potential returns per unit of risk. Hudson Technologies is currently generating about -0.03 per unit of risk. If you would invest 442.00 in Aegon NV ADR on September 3, 2024 and sell it today you would earn a total of 207.00 from holding Aegon NV ADR or generate 46.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. Hudson Technologies
Performance |
| Timeline |
| Aegon NV ADR |
| Hudson Technologies |
Aegon NV and Hudson Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Hudson Technologies
The main advantage of trading using opposite Aegon NV and Hudson Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Hudson Technologies 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 Hudson Technologies will offset losses from the drop in Hudson Technologies' long position.| Aegon NV vs. Global Indemnity PLC | Aegon NV vs. Erie Indemnity | Aegon NV vs. AMERISAFE | Aegon NV vs. Diamond Hill Investment |
| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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