Correlation Between Vita Coco and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Vita Coco 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 Vita Coco and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vita Coco and Aegon NV ADR, you can compare the effects of market volatilities on Vita Coco 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 Vita Coco with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vita Coco and Aegon NV.
Diversification Opportunities for Vita Coco and Aegon NV
Poor diversification
The 3 months correlation between Vita and Aegon is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Vita Coco and Aegon NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV ADR and Vita Coco 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 Vita Coco 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 ADR has no effect on the direction of Vita Coco i.e., Vita Coco and Aegon NV go up and down completely randomly.
Pair Corralation between Vita Coco and Aegon NV
Given the investment horizon of 90 days Vita Coco is expected to generate 1.39 times more return on investment than Aegon NV. However, Vita Coco is 1.39 times more volatile than Aegon NV ADR. It trades about 0.23 of its potential returns per unit of risk. Aegon NV ADR is currently generating about 0.08 per unit of risk. If you would invest 3,197 in Vita Coco on September 2, 2024 and sell it today you would earn a total of 357.00 from holding Vita Coco or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vita Coco vs. Aegon NV ADR
Performance |
| Timeline |
| Vita Coco |
| Aegon NV ADR |
Vita Coco and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vita Coco and Aegon NV
The main advantage of trading using opposite Vita Coco and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vita Coco 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.| Vita Coco vs. Coca Cola Femsa SAB | Vita Coco vs. Coca Cola European Partners | Vita Coco vs. Embotelladora Andina SA | Vita Coco vs. Monster Beverage Corp |
| Aegon NV vs. Hartford Financial Services | Aegon NV vs. Goosehead Insurance | Aegon NV vs. International General Insurance | Aegon NV vs. Enstar Group Limited |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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