Correlation Between American International and Aegon NV
Can any of the company-specific risk be diversified away by investing in both American International and Aegon NV 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 American International and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American International Group and Aegon NV, you can compare the effects of market volatilities on American International and Aegon NV 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 American International with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of American International and Aegon NV.
Diversification Opportunities for American International and Aegon NV
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Aegon is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding American International Group and Aegon NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV and American International 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 American International Group are associated (or correlated) with Aegon NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon NV has no effect on the direction of American International i.e., American International and Aegon NV go up and down completely randomly.
Pair Corralation between American International and Aegon NV
If you would invest 618.00 in Aegon NV on September 5, 2024 and sell it today you would earn a total of 0.00 from holding Aegon NV or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
American International Group vs. Aegon NV
Performance |
| Timeline |
| American International |
| Aegon NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American International and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American International and Aegon NV
The main advantage of trading using opposite American International and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American International position performs unexpectedly, Aegon NV 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 Aegon NV will offset losses from the drop in Aegon NV's long position.| American International vs. Axa Equitable Holdings | American International vs. Arch Capital Group | American International vs. Old Republic International | American International vs. Sun Life Financial |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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