Correlation Between Aegon NV and Inflection Point
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Inflection Point 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 Inflection Point 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 Inflection Point Acquisition, you can compare the effects of market volatilities on Aegon NV and Inflection Point 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 Inflection Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Inflection Point.
Diversification Opportunities for Aegon NV and Inflection Point
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aegon and Inflection is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq 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 Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of Aegon NV i.e., Aegon NV and Inflection Point go up and down completely randomly.
Pair Corralation between Aegon NV and Inflection Point
Considering the 90-day investment horizon Aegon NV ADR is expected to generate 6.79 times more return on investment than Inflection Point. However, Aegon NV is 6.79 times more volatile than Inflection Point Acquisition. It trades about 0.06 of its potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.09 per unit of risk. If you would invest 508.00 in Aegon NV ADR on August 24, 2024 and sell it today you would earn a total of 114.00 from holding Aegon NV ADR or generate 22.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Aegon NV ADR vs. Inflection Point Acquisition
Performance |
| Timeline |
| Aegon NV ADR |
| Inflection Point Acq |
Aegon NV and Inflection Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Inflection Point
The main advantage of trading using opposite Aegon NV and Inflection Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Inflection Point 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 Inflection Point will offset losses from the drop in Inflection Point'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 |
| Inflection Point vs. Aegon NV ADR | Inflection Point vs. NI Holdings | Inflection Point vs. Siriuspoint | Inflection Point vs. Marfrig Global Foods |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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