Correlation Between Aegon NV and One Liberty
Can any of the company-specific risk be diversified away by investing in both Aegon NV and One Liberty 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 One Liberty 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 One Liberty Properties, you can compare the effects of market volatilities on Aegon NV and One Liberty 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 One Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and One Liberty.
Diversification Opportunities for Aegon NV and One Liberty
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aegon and One is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and One Liberty Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Liberty Properties 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 One Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Liberty Properties has no effect on the direction of Aegon NV i.e., Aegon NV and One Liberty go up and down completely randomly.
Pair Corralation between Aegon NV and One Liberty
Considering the 90-day investment horizon Aegon NV is expected to generate 6.33 times less return on investment than One Liberty. In addition to that, Aegon NV is 1.05 times more volatile than One Liberty Properties. It trades about 0.02 of its total potential returns per unit of risk. One Liberty Properties is currently generating about 0.14 per unit of volatility. If you would invest 2,239 in One Liberty Properties on August 24, 2024 and sell it today you would earn a total of 620.00 from holding One Liberty Properties or generate 27.69% 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. One Liberty Properties
Performance |
| Timeline |
| Aegon NV ADR |
| One Liberty Properties |
Aegon NV and One Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and One Liberty
The main advantage of trading using opposite Aegon NV and One Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, One Liberty 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 One Liberty will offset losses from the drop in One Liberty's long position.| Aegon NV vs. Hartford Financial Services | Aegon NV vs. Enstar Group Limited | Aegon NV vs. American International Group | Aegon NV vs. Axa Equitable Holdings |
| One Liberty vs. Generationome Properties | One Liberty vs. HUMANA INC | One Liberty vs. Aquagold International | One Liberty vs. Barloworld Ltd ADR |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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