Correlation Between Aegon NV and Randstad
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Randstad 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 Randstad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegon NV and Randstad NV, you can compare the effects of market volatilities on Aegon NV and Randstad 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 Randstad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Randstad.
Diversification Opportunities for Aegon NV and Randstad
Modest diversification
The 3 months correlation between Aegon and Randstad is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV and Randstad NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Randstad 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 Randstad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Randstad NV has no effect on the direction of Aegon NV i.e., Aegon NV and Randstad go up and down completely randomly.
Pair Corralation between Aegon NV and Randstad
Assuming the 90 days trading horizon Aegon NV is expected to under-perform the Randstad. But the stock apears to be less risky and, when comparing its historical volatility, Aegon NV is 1.11 times less risky than Randstad. The stock trades about -0.15 of its potential returns per unit of risk. The Randstad NV is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,213 in Randstad NV on December 8, 2024 and sell it today you would lose (13.00) from holding Randstad NV or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV vs. Randstad NV
Performance |
| Timeline |
| Aegon NV |
| Randstad NV |
Aegon NV and Randstad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Randstad
The main advantage of trading using opposite Aegon NV and Randstad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Randstad 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 Randstad will offset losses from the drop in Randstad's long position.| Aegon NV vs. ING Groep NV | ||
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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