Correlation Between Ageas SANV and Brederode
Can any of the company-specific risk be diversified away by investing in both Ageas SANV and Brederode 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 Ageas SANV and Brederode into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ageas SANV and Brederode SA, you can compare the effects of market volatilities on Ageas SANV and Brederode 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 Ageas SANV with a short position of Brederode. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ageas SANV and Brederode.
Diversification Opportunities for Ageas SANV and Brederode
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ageas and Brederode is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding ageas SANV and Brederode SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brederode SA and Ageas SANV 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 ageas SANV are associated (or correlated) with Brederode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brederode SA has no effect on the direction of Ageas SANV i.e., Ageas SANV and Brederode go up and down completely randomly.
Pair Corralation between Ageas SANV and Brederode
Assuming the 90 days trading horizon ageas SANV is expected to generate 0.92 times more return on investment than Brederode. However, ageas SANV is 1.08 times less risky than Brederode. It trades about 0.14 of its potential returns per unit of risk. Brederode SA is currently generating about 0.04 per unit of risk. If you would invest 3,522 in ageas SANV on November 3, 2024 and sell it today you would earn a total of 1,460 from holding ageas SANV or generate 41.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ageas SANV vs. Brederode SA
Performance |
| Timeline |
| ageas SANV |
| Brederode SA |
Ageas SANV and Brederode Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ageas SANV and Brederode
The main advantage of trading using opposite Ageas SANV and Brederode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ageas SANV position performs unexpectedly, Brederode 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 Brederode will offset losses from the drop in Brederode's long position.| Ageas SANV vs. KBC Groep NV | Ageas SANV vs. Groep Brussel Lambert | Ageas SANV vs. Solvay SA | Ageas SANV vs. Ackermans Van Haaren |
| Brederode vs. Immolease Trust NV | Brederode vs. Retail Estates | Brederode vs. Onward Medical NV | Brederode vs. Vastned Retail Belgium |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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