Correlation Between Aegon NV and PT Indofood
Can any of the company-specific risk be diversified away by investing in both Aegon NV and PT Indofood 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 PT Indofood 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 PT Indofood Sukses, you can compare the effects of market volatilities on Aegon NV and PT Indofood 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 PT Indofood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and PT Indofood.
Diversification Opportunities for Aegon NV and PT Indofood
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aegon and PIFMF is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and PT Indofood Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indofood Sukses 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 PT Indofood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indofood Sukses has no effect on the direction of Aegon NV i.e., Aegon NV and PT Indofood go up and down completely randomly.
Pair Corralation between Aegon NV and PT Indofood
Considering the 90-day investment horizon Aegon NV ADR is expected to generate 1.19 times more return on investment than PT Indofood. However, Aegon NV is 1.19 times more volatile than PT Indofood Sukses. It trades about 0.06 of its potential returns per unit of risk. PT Indofood Sukses is currently generating about -0.01 per unit of risk. If you would invest 531.00 in Aegon NV ADR on September 4, 2024 and sell it today you would earn a total of 103.00 from holding Aegon NV ADR or generate 19.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 58.54% |
| Values | Daily Returns |
Aegon NV ADR vs. PT Indofood Sukses
Performance |
| Timeline |
| Aegon NV ADR |
| PT Indofood Sukses |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aegon NV and PT Indofood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and PT Indofood
The main advantage of trading using opposite Aegon NV and PT Indofood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, PT Indofood 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 PT Indofood will offset losses from the drop in PT Indofood's long position.| Aegon NV vs. Goosehead Insurance | Aegon NV vs. Enstar Group Limited | Aegon NV vs. American International Group | Aegon NV vs. Sun Life Financial |
| PT Indofood vs. Uber Technologies | PT Indofood vs. Fernhill Beverage | PT Indofood vs. NETGEAR | PT Indofood vs. Keurig Dr Pepper |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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