Correlation Between Aegon NV and Virtus Investment
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Virtus Investment 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 Virtus Investment 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 Virtus Investment Partners,, you can compare the effects of market volatilities on Aegon NV and Virtus Investment 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 Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Virtus Investment.
Diversification Opportunities for Aegon NV and Virtus Investment
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aegon and Virtus is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Virtus Investment Partners, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of Aegon NV i.e., Aegon NV and Virtus Investment go up and down completely randomly.
Pair Corralation between Aegon NV and Virtus Investment
Considering the 90-day investment horizon Aegon NV ADR is expected to generate 1.07 times more return on investment than Virtus Investment. However, Aegon NV is 1.07 times more volatile than Virtus Investment Partners,. It trades about 0.06 of its potential returns per unit of risk. Virtus Investment Partners, is currently generating about -0.29 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. Virtus Investment Partners,
Performance |
| Timeline |
| Aegon NV ADR |
| Virtus Investment |
Aegon NV and Virtus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Virtus Investment
The main advantage of trading using opposite Aegon NV and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Virtus Investment 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 Virtus Investment will offset losses from the drop in Virtus Investment'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 |
| Virtus Investment vs. Invesco Advantage MIT | Virtus Investment vs. Invesco Municipal Trust | Virtus Investment vs. Invesco California Value | Virtus Investment vs. Tri Continental Closed |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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