Correlation Between Aegon NV and KINDER

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Can any of the company-specific risk be diversified away by investing in both Aegon NV and KINDER 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 KINDER 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 KINDER MORGAN INC, you can compare the effects of market volatilities on Aegon NV and KINDER 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 KINDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and KINDER.

Diversification Opportunities for Aegon NV and KINDER

-0.56
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Aegon and KINDER is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and KINDER MORGAN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINDER MORGAN INC 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 KINDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINDER MORGAN INC has no effect on the direction of Aegon NV i.e., Aegon NV and KINDER go up and down completely randomly.

Pair Corralation between Aegon NV and KINDER

Considering the 90-day investment horizon Aegon NV ADR is expected to generate 1.63 times more return on investment than KINDER. However, Aegon NV is 1.63 times more volatile than KINDER MORGAN INC. It trades about 0.06 of its potential returns per unit of risk. KINDER MORGAN INC is currently generating about 0.0 per unit of risk. If you would invest  442.00  in Aegon NV ADR on September 3, 2024 and sell it today you would earn a total of  207.00  from holding Aegon NV ADR or generate 46.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy97.78%
ValuesDaily Returns

Aegon NV ADR  vs.  KINDER MORGAN INC

 Performance 
       Timeline  
Aegon NV ADR 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Aegon NV ADR are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Aegon NV may actually be approaching a critical reversion point that can send shares even higher in January 2025.
KINDER MORGAN INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days KINDER MORGAN INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KINDER is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Aegon NV and KINDER Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aegon NV and KINDER

The main advantage of trading using opposite Aegon NV and KINDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, KINDER 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 KINDER will offset losses from the drop in KINDER's long position.
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The idea behind Aegon NV ADR and KINDER MORGAN INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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