Correlation Between Ecovyst and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Ecovyst 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 Ecovyst and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecovyst and Aegon NV ADR, you can compare the effects of market volatilities on Ecovyst 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 Ecovyst with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecovyst and Aegon NV.
Diversification Opportunities for Ecovyst and Aegon NV
Weak diversification
The 3 months correlation between Ecovyst and Aegon is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ecovyst 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 Ecovyst 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 Ecovyst 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 Ecovyst i.e., Ecovyst and Aegon NV go up and down completely randomly.
Pair Corralation between Ecovyst and Aegon NV
Given the investment horizon of 90 days Ecovyst is expected to under-perform the Aegon NV. In addition to that, Ecovyst is 1.88 times more volatile than Aegon NV ADR. It trades about -0.01 of its total potential returns per unit of risk. Aegon NV ADR is currently generating about 0.06 per unit of volatility. If you would invest 531.00 in Aegon NV ADR on September 4, 2024 and sell it today you would earn a total of 110.00 from holding Aegon NV ADR or generate 20.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecovyst vs. Aegon NV ADR
Performance |
| Timeline |
| Ecovyst |
| Aegon NV ADR |
Ecovyst and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecovyst and Aegon NV
The main advantage of trading using opposite Ecovyst and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecovyst 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.| Ecovyst vs. Orion Engineered Carbons | Ecovyst vs. Cabot | Ecovyst vs. Minerals Technologies | Ecovyst vs. Quaker Chemical |
| Aegon NV vs. Goosehead Insurance | Aegon NV vs. Enstar Group Limited | Aegon NV vs. American International Group | Aegon NV vs. Sun Life Financial |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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