Correlation Between AFC Ajax and Aegon NV
Can any of the company-specific risk be diversified away by investing in both AFC Ajax 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 AFC Ajax and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AFC Ajax NV and Aegon NV, you can compare the effects of market volatilities on AFC Ajax 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 AFC Ajax with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFC Ajax and Aegon NV.
Diversification Opportunities for AFC Ajax and Aegon NV
Very good diversification
The 3 months correlation between AFC and Aegon is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding AFC Ajax NV and Aegon NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV and AFC Ajax 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 AFC Ajax NV 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 AFC Ajax i.e., AFC Ajax and Aegon NV go up and down completely randomly.
Pair Corralation between AFC Ajax and Aegon NV
Assuming the 90 days trading horizon AFC Ajax NV is expected to under-perform the Aegon NV. But the stock apears to be less risky and, when comparing its historical volatility, AFC Ajax NV is 1.38 times less risky than Aegon NV. The stock trades about -0.05 of its potential returns per unit of risk. The Aegon NV is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 605.00 in Aegon NV on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Aegon NV or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AFC Ajax NV vs. Aegon NV
Performance |
| Timeline |
| AFC Ajax NV |
| Aegon NV |
AFC Ajax and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AFC Ajax and Aegon NV
The main advantage of trading using opposite AFC Ajax and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFC Ajax 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.| AFC Ajax vs. Aegon NV | AFC Ajax vs. Koninklijke Philips NV | AFC Ajax vs. Randstad NV | AFC Ajax vs. Akzo Nobel NV |
| Aegon NV vs. ING Groep NV | Aegon NV vs. Koninklijke KPN NV | Aegon NV vs. ABN Amro Group | Aegon NV vs. NN Group NV |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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