Correlation Between Mamas Creations and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Mamas Creations 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 Mamas Creations and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mamas Creations and Aegon NV ADR, you can compare the effects of market volatilities on Mamas Creations 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 Mamas Creations with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mamas Creations and Aegon NV.
Diversification Opportunities for Mamas Creations and Aegon NV
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mamas and Aegon is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Mamas Creations 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 Mamas Creations 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 Mamas Creations 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 Mamas Creations i.e., Mamas Creations and Aegon NV go up and down completely randomly.
Pair Corralation between Mamas Creations and Aegon NV
Given the investment horizon of 90 days Mamas Creations is expected to generate 1.68 times more return on investment than Aegon NV. However, Mamas Creations is 1.68 times more volatile than Aegon NV ADR. It trades about 0.55 of its potential returns per unit of risk. Aegon NV ADR is currently generating about 0.0 per unit of risk. If you would invest 711.00 in Mamas Creations on September 4, 2024 and sell it today you would earn a total of 274.00 from holding Mamas Creations or generate 38.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mamas Creations vs. Aegon NV ADR
Performance |
| Timeline |
| Mamas Creations |
| Aegon NV ADR |
Mamas Creations and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mamas Creations and Aegon NV
The main advantage of trading using opposite Mamas Creations and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mamas Creations 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.| Mamas Creations vs. Aegon NV ADR | Mamas Creations vs. Kinsale Capital Group | Mamas Creations vs. Jutal Offshore Oil | Mamas Creations vs. ICC Holdings |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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