Correlation Between Aegon NV and Tandy Leather
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Tandy Leather 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 Tandy Leather 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 Tandy Leather Factory, you can compare the effects of market volatilities on Aegon NV and Tandy Leather 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 Tandy Leather. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Tandy Leather.
Diversification Opportunities for Aegon NV and Tandy Leather
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aegon and Tandy is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Tandy Leather Factory in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tandy Leather Factory 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 Tandy Leather. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tandy Leather Factory has no effect on the direction of Aegon NV i.e., Aegon NV and Tandy Leather go up and down completely randomly.
Pair Corralation between Aegon NV and Tandy Leather
Considering the 90-day investment horizon Aegon NV ADR is expected to under-perform the Tandy Leather. In addition to that, Aegon NV is 1.74 times more volatile than Tandy Leather Factory. It trades about -0.06 of its total potential returns per unit of risk. Tandy Leather Factory is currently generating about -0.08 per unit of volatility. If you would invest 300.00 in Tandy Leather Factory on January 7, 2025 and sell it today you would lose (8.00) from holding Tandy Leather Factory or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. Tandy Leather Factory
Performance |
| Timeline |
| Aegon NV ADR |
| Tandy Leather Factory |
Aegon NV and Tandy Leather Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Tandy Leather
The main advantage of trading using opposite Aegon NV and Tandy Leather positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Tandy Leather 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 Tandy Leather will offset losses from the drop in Tandy Leather'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 |
| Tandy Leather vs. Macys Inc | Tandy Leather vs. Wayfair | Tandy Leather vs. 1StdibsCom | Tandy Leather vs. AutoNation |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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