Correlation Between Aegon NV and Link Real
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Link Real 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 Link Real 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 Link Real Estate, you can compare the effects of market volatilities on Aegon NV and Link Real 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 Link Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Link Real.
Diversification Opportunities for Aegon NV and Link Real
Average diversification
The 3 months correlation between Aegon and Link is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Link Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Link Real Estate 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 Link Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Link Real Estate has no effect on the direction of Aegon NV i.e., Aegon NV and Link Real go up and down completely randomly.
Pair Corralation between Aegon NV and Link Real
Considering the 90-day investment horizon Aegon NV ADR is expected to generate 0.56 times more return on investment than Link Real. However, Aegon NV ADR is 1.77 times less risky than Link Real. It trades about 0.1 of its potential returns per unit of risk. Link Real Estate is currently generating about -0.11 per unit of risk. If you would invest 628.00 in Aegon NV ADR on September 1, 2024 and sell it today you would earn a total of 21.00 from holding Aegon NV ADR or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. Link Real Estate
Performance |
| Timeline |
| Aegon NV ADR |
| Link Real Estate |
Aegon NV and Link Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Link Real
The main advantage of trading using opposite Aegon NV and Link Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Link Real 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 Link Real will offset losses from the drop in Link Real'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 |
| Link Real vs. Kimco Realty | Link Real vs. Simon Property Group | Link Real vs. Saul Centers | Link Real vs. Kimco Realty |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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