Correlation Between Aegon NV and NI Holdings
Can any of the company-specific risk be diversified away by investing in both Aegon NV and NI Holdings 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 NI Holdings 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 NI Holdings, you can compare the effects of market volatilities on Aegon NV and NI Holdings 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 NI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and NI Holdings.
Diversification Opportunities for Aegon NV and NI Holdings
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aegon and NODK is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and NI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NI Holdings 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 NI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NI Holdings has no effect on the direction of Aegon NV i.e., Aegon NV and NI Holdings go up and down completely randomly.
Pair Corralation between Aegon NV and NI Holdings
Considering the 90-day investment horizon Aegon NV ADR is expected to under-perform the NI Holdings. In addition to that, Aegon NV is 1.42 times more volatile than NI Holdings. It trades about -0.06 of its total potential returns per unit of risk. NI Holdings is currently generating about 0.25 per unit of volatility. If you would invest 1,560 in NI Holdings on August 24, 2024 and sell it today you would earn a total of 89.00 from holding NI Holdings or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. NI Holdings
Performance |
| Timeline |
| Aegon NV ADR |
| NI Holdings |
Aegon NV and NI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and NI Holdings
The main advantage of trading using opposite Aegon NV and NI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, NI Holdings 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 NI Holdings will offset losses from the drop in NI Holdings' 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 |
| NI Holdings vs. Horace Mann Educators | NI Holdings vs. Donegal Group A | NI Holdings vs. Global Indemnity PLC | NI Holdings vs. Selective Insurance Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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