Correlation Between Aegon NV and VHAI
Can any of the company-specific risk be diversified away by investing in both Aegon NV and VHAI 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 VHAI 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 VHAI, you can compare the effects of market volatilities on Aegon NV and VHAI 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 VHAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and VHAI.
Diversification Opportunities for Aegon NV and VHAI
Good diversification
The 3 months correlation between Aegon and VHAI is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and VHAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VHAI 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 VHAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VHAI has no effect on the direction of Aegon NV i.e., Aegon NV and VHAI go up and down completely randomly.
Pair Corralation between Aegon NV and VHAI
If you would invest 0.57 in VHAI on October 7, 2024 and sell it today you would earn a total of 0.00 from holding VHAI or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Aegon NV ADR vs. VHAI
Performance |
| Timeline |
| Aegon NV ADR |
| VHAI |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Aegon NV and VHAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and VHAI
The main advantage of trading using opposite Aegon NV and VHAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, VHAI 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 VHAI will offset losses from the drop in VHAI'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 |
| VHAI vs. Verra Mobility Corp | VHAI vs. Delek Logistics Partners | VHAI vs. RLJ Lodging Trust | VHAI vs. Yuexiu Transport Infrastructure |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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