Correlation Between Aegon NV and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Aegon NV and PennantPark Floating 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 PennantPark Floating 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 PennantPark Floating Rate, you can compare the effects of market volatilities on Aegon NV and PennantPark Floating 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 PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and PennantPark Floating.
Diversification Opportunities for Aegon NV and PennantPark Floating
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aegon and PennantPark is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and PennantPark Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Floating Rate 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 PennantPark Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Floating Rate has no effect on the direction of Aegon NV i.e., Aegon NV and PennantPark Floating go up and down completely randomly.
Pair Corralation between Aegon NV and PennantPark Floating
Considering the 90-day investment horizon Aegon NV ADR is expected to generate 1.65 times more return on investment than PennantPark Floating. However, Aegon NV is 1.65 times more volatile than PennantPark Floating Rate. It trades about 0.09 of its potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.07 per unit of risk. If you would invest 476.00 in Aegon NV ADR on September 1, 2024 and sell it today you would earn a total of 173.00 from holding Aegon NV ADR or generate 36.34% 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. PennantPark Floating Rate
Performance |
| Timeline |
| Aegon NV ADR |
| PennantPark Floating Rate |
Aegon NV and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and PennantPark Floating
The main advantage of trading using opposite Aegon NV and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, PennantPark Floating 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 PennantPark Floating will offset losses from the drop in PennantPark Floating'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 |
| PennantPark Floating vs. Visa Class A | PennantPark Floating vs. Diamond Hill Investment | PennantPark Floating vs. Distoken Acquisition | PennantPark Floating vs. Associated Capital 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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