Correlation Between Equinor ASA and Aegon Funding
Can any of the company-specific risk be diversified away by investing in both Equinor ASA and Aegon Funding 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 Equinor ASA and Aegon Funding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinor ASA ADR and Aegon Funding, you can compare the effects of market volatilities on Equinor ASA and Aegon Funding 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 Equinor ASA with a short position of Aegon Funding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinor ASA and Aegon Funding.
Diversification Opportunities for Equinor ASA and Aegon Funding
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Equinor and Aegon is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Equinor ASA ADR and Aegon Funding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon Funding and Equinor ASA 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 Equinor ASA ADR are associated (or correlated) with Aegon Funding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon Funding has no effect on the direction of Equinor ASA i.e., Equinor ASA and Aegon Funding go up and down completely randomly.
Pair Corralation between Equinor ASA and Aegon Funding
Given the investment horizon of 90 days Equinor ASA ADR is expected to generate 1.68 times more return on investment than Aegon Funding. However, Equinor ASA is 1.68 times more volatile than Aegon Funding. It trades about 0.16 of its potential returns per unit of risk. Aegon Funding is currently generating about 0.1 per unit of risk. If you would invest 2,272 in Equinor ASA ADR on September 2, 2024 and sell it today you would earn a total of 146.00 from holding Equinor ASA ADR or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinor ASA ADR vs. Aegon Funding
Performance |
| Timeline |
| Equinor ASA ADR |
| Aegon Funding |
Equinor ASA and Aegon Funding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinor ASA and Aegon Funding
The main advantage of trading using opposite Equinor ASA and Aegon Funding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinor ASA position performs unexpectedly, Aegon Funding 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 Funding will offset losses from the drop in Aegon Funding's long position.| Equinor ASA vs. Shell PLC ADR | Equinor ASA vs. BP PLC ADR | Equinor ASA vs. Eni SpA ADR | Equinor ASA vs. Galp Energa |
| Aegon Funding vs. Stepan Company | Aegon Funding vs. Nomura Holdings ADR | Aegon Funding vs. Luxfer Holdings PLC | Aegon Funding vs. Alvarium Tiedemann Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |