Correlation Between Aegon NV and Lion One
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Lion One 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 Lion One 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 Lion One Metals, you can compare the effects of market volatilities on Aegon NV and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Lion One.
Diversification Opportunities for Aegon NV and Lion One
Weak diversification
The 3 months correlation between Aegon and Lion is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Aegon NV i.e., Aegon NV and Lion One go up and down completely randomly.
Pair Corralation between Aegon NV and Lion One
Considering the 90-day investment horizon Aegon NV ADR is expected to generate 0.48 times more return on investment than Lion One. However, Aegon NV ADR is 2.07 times less risky than Lion One. It trades about -0.1 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.26 per unit of risk. If you would invest 644.00 in Aegon NV ADR on August 25, 2024 and sell it today you would lose (21.00) from holding Aegon NV ADR or give up 3.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aegon NV ADR vs. Lion One Metals
Performance |
| Timeline |
| Aegon NV ADR |
| Lion One Metals |
Aegon NV and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Lion One
The main advantage of trading using opposite Aegon NV and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One'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 |
| Lion One vs. Ascendant Resources | Lion One vs. Cantex Mine Development | Lion One vs. Amarc Resources | Lion One vs. Sterling Metals Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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