Correlation Between Aegon NV and Mamas Creations
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Aegon NV ADR vs. Mamas Creations
Performance |
Timeline |
Aegon NV ADR |
Mamas Creations |
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.Aegon NV vs. Hartford Financial Services | Aegon NV vs. Goosehead Insurance | Aegon NV vs. International General Insurance | Aegon NV vs. Enstar Group Limited |
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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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