Correlation Between Aegon NV and Selective Insurance
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Selective Insurance 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 Selective Insurance 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 Selective Insurance Group, you can compare the effects of market volatilities on Aegon NV and Selective Insurance 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 Selective Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Selective Insurance.
Diversification Opportunities for Aegon NV and Selective Insurance
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aegon and Selective is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Selective Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selective 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 Selective Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selective Insurance has no effect on the direction of Aegon NV i.e., Aegon NV and Selective Insurance go up and down completely randomly.
Pair Corralation between Aegon NV and Selective Insurance
Considering the 90-day investment horizon Aegon NV ADR is expected to generate 1.33 times more return on investment than Selective Insurance. However, Aegon NV is 1.33 times more volatile than Selective Insurance Group. It trades about 0.06 of its potential returns per unit of risk. Selective Insurance Group is currently generating about -0.19 per unit of risk. If you would invest 629.00 in Aegon NV ADR on October 28, 2024 and sell it today you would earn a total of 21.00 from holding Aegon NV ADR or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. Selective Insurance Group
Performance |
| Timeline |
| Aegon NV ADR |
| Selective Insurance |
Aegon NV and Selective Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Selective Insurance
The main advantage of trading using opposite Aegon NV and Selective Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Selective Insurance 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 Selective Insurance will offset losses from the drop in Selective Insurance'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 |
| Selective Insurance vs. Kemper | Selective Insurance vs. Donegal Group B | Selective Insurance vs. Argo Group International | Selective Insurance vs. Global Indemnity PLC |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |