Correlation Between Aegon NV and Presidio Property
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Presidio Property 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 Presidio Property 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 Presidio Property Trust, you can compare the effects of market volatilities on Aegon NV and Presidio Property 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 Presidio Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Presidio Property.
Diversification Opportunities for Aegon NV and Presidio Property
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aegon and Presidio is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Presidio Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Presidio Property Trust 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 Presidio Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Presidio Property Trust has no effect on the direction of Aegon NV i.e., Aegon NV and Presidio Property go up and down completely randomly.
Pair Corralation between Aegon NV and Presidio Property
Considering the 90-day investment horizon Aegon NV ADR is expected to generate 0.31 times more return on investment than Presidio Property. However, Aegon NV ADR is 3.19 times less risky than Presidio Property. It trades about 0.05 of its potential returns per unit of risk. Presidio Property Trust is currently generating about -0.03 per unit of risk. If you would invest 550.00 in Aegon NV ADR on August 29, 2024 and sell it today you would earn a total of 76.00 from holding Aegon NV ADR or generate 13.82% 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. Presidio Property Trust
Performance |
| Timeline |
| Aegon NV ADR |
| Presidio Property Trust |
Aegon NV and Presidio Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Presidio Property
The main advantage of trading using opposite Aegon NV and Presidio Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Presidio Property 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 Presidio Property will offset losses from the drop in Presidio Property'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 |
| Presidio Property vs. VICI Properties | Presidio Property vs. Essential Properties Realty | Presidio Property vs. Empire State Realty | Presidio Property vs. American Assets Trust |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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