Correlation Between Aegon NV and ICC Holdings
Can any of the company-specific risk be diversified away by investing in both Aegon NV and ICC Holdings 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 ICC Holdings 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 ICC Holdings, you can compare the effects of market volatilities on Aegon NV and ICC Holdings 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 ICC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and ICC Holdings.
Diversification Opportunities for Aegon NV and ICC Holdings
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aegon and ICC is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and ICC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICC Holdings 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 ICC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICC Holdings has no effect on the direction of Aegon NV i.e., Aegon NV and ICC Holdings go up and down completely randomly.
Pair Corralation between Aegon NV and ICC Holdings
Considering the 90-day investment horizon Aegon NV ADR is expected to generate 2.98 times more return on investment than ICC Holdings. However, Aegon NV is 2.98 times more volatile than ICC Holdings. It trades about 0.22 of its potential returns per unit of risk. ICC Holdings is currently generating about -0.09 per unit of risk. If you would invest 637.00 in Aegon NV ADR on November 18, 2024 and sell it today you would earn a total of 29.00 from holding Aegon NV ADR or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. ICC Holdings
Performance |
| Timeline |
| Aegon NV ADR |
| ICC Holdings |
Aegon NV and ICC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and ICC Holdings
The main advantage of trading using opposite Aegon NV and ICC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, ICC Holdings 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 ICC Holdings will offset losses from the drop in ICC Holdings' 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 |
| ICC Holdings vs. Employers Holdings | ICC Holdings vs. AMERISAFE | ICC Holdings vs. NMI Holdings | ICC Holdings vs. Investors Title |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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