Correlation Between Aegon NV and Pekin Life
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Pekin Life 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 Pekin Life 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 Pekin Life Insurance, you can compare the effects of market volatilities on Aegon NV and Pekin Life 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 Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Pekin Life.
Diversification Opportunities for Aegon NV and Pekin Life
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aegon and Pekin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Pekin Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pekin Life Insurance 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 Pekin Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pekin Life Insurance has no effect on the direction of Aegon NV i.e., Aegon NV and Pekin Life go up and down completely randomly.
Pair Corralation between Aegon NV and Pekin Life
Considering the 90-day investment horizon Aegon NV ADR is expected to under-perform the Pekin Life. In addition to that, Aegon NV is 3.29 times more volatile than Pekin Life Insurance. It trades about -0.09 of its total potential returns per unit of risk. Pekin Life Insurance is currently generating about 0.24 per unit of volatility. If you would invest 1,150 in Pekin Life Insurance on August 27, 2024 and sell it today you would earn a total of 25.00 from holding Pekin Life Insurance or generate 2.17% 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. Pekin Life Insurance
Performance |
| Timeline |
| Aegon NV ADR |
| Pekin Life Insurance |
Aegon NV and Pekin Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Pekin Life
The main advantage of trading using opposite Aegon NV and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Pekin Life 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 Pekin Life will offset losses from the drop in Pekin Life'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 |
| Pekin Life vs. Invesco High Income | Pekin Life vs. Blackrock Muniholdings Ny | Pekin Life vs. MFS Investment Grade | Pekin Life vs. Federated Premier Municipal |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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