Correlation Between Aegon NV and Mamas Creations

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Can any of the company-specific risk be diversified away by investing in both Aegon NV and Mamas Creations 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 Mamas Creations 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 Mamas Creations, you can compare the effects of market volatilities on Aegon NV and Mamas Creations 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 Mamas Creations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Mamas Creations.

Diversification Opportunities for Aegon NV and Mamas Creations

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between Aegon and Mamas is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Mamas Creations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mamas Creations 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 Mamas Creations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mamas Creations has no effect on the direction of Aegon NV i.e., Aegon NV and Mamas Creations go up and down completely randomly.

Pair Corralation between Aegon NV and Mamas Creations

Considering the 90-day investment horizon Aegon NV is expected to generate 2.3 times less return on investment than Mamas Creations. But when comparing it to its historical volatility, Aegon NV ADR is 1.98 times less risky than Mamas Creations. It trades about 0.09 of its potential returns per unit of risk. Mamas Creations is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  809.00  in Mamas Creations on September 12, 2024 and sell it today you would earn a total of  137.00  from holding Mamas Creations or generate 16.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Aegon NV ADR  vs.  Mamas Creations

 Performance 
       Timeline  
Aegon NV ADR 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Aegon NV ADR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Aegon NV may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Mamas Creations 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Mamas Creations are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting primary indicators, Mamas Creations sustained solid returns over the last few months and may actually be approaching a breakup point.

Aegon NV and Mamas Creations Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aegon NV and Mamas Creations

The main advantage of trading using opposite Aegon NV and Mamas Creations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Mamas Creations 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 Mamas Creations will offset losses from the drop in Mamas Creations' long position.
The idea behind Aegon NV ADR and Mamas Creations pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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