Correlation Between Aegon NV and ING Groep
Can any of the company-specific risk be diversified away by investing in both Aegon NV and ING Groep 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 ING Groep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegon NV and ING Groep NV, you can compare the effects of market volatilities on Aegon NV and ING Groep 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 ING Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and ING Groep.
Diversification Opportunities for Aegon NV and ING Groep
Pay attention - limited upside
The 3 months correlation between Aegon and ING is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV and ING Groep NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Groep NV 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 are associated (or correlated) with ING Groep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Groep NV has no effect on the direction of Aegon NV i.e., Aegon NV and ING Groep go up and down completely randomly.
Pair Corralation between Aegon NV and ING Groep
Assuming the 90 days trading horizon Aegon NV is expected to generate 1.35 times more return on investment than ING Groep. However, Aegon NV is 1.35 times more volatile than ING Groep NV. It trades about 0.02 of its potential returns per unit of risk. ING Groep NV is currently generating about -0.32 per unit of risk. If you would invest 593.00 in Aegon NV on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Aegon NV or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV vs. ING Groep NV
Performance |
| Timeline |
| Aegon NV |
| ING Groep NV |
Aegon NV and ING Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and ING Groep
The main advantage of trading using opposite Aegon NV and ING Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, ING Groep 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 ING Groep will offset losses from the drop in ING Groep's long position.| Aegon NV vs. ING Groep NV | Aegon NV vs. Koninklijke KPN NV | Aegon NV vs. ABN Amro Group | Aegon NV vs. NN Group NV |
| ING Groep vs. Aegon NV | ING Groep vs. ABN Amro Group | ING Groep vs. Koninklijke Philips NV | ING Groep vs. Unilever PLC |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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