Correlation Between Pekin Life and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Pekin Life 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 Pekin Life and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pekin Life Insurance and Aegon NV ADR, you can compare the effects of market volatilities on Pekin Life 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 Pekin Life with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pekin Life and Aegon NV.
Diversification Opportunities for Pekin Life and Aegon NV
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pekin and Aegon is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Pekin Life Insurance 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 Pekin Life 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 Pekin Life Insurance 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 Pekin Life i.e., Pekin Life and Aegon NV go up and down completely randomly.
Pair Corralation between Pekin Life and Aegon NV
Given the investment horizon of 90 days Pekin Life is expected to generate 6.02 times less return on investment than Aegon NV. In addition to that, Pekin Life is 1.07 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 0.05 per unit of volatility. If you would invest 432.00 in Aegon NV ADR on August 27, 2024 and sell it today you would earn a total of 191.00 from holding Aegon NV ADR or generate 44.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pekin Life Insurance vs. Aegon NV ADR
Performance |
| Timeline |
| Pekin Life Insurance |
| Aegon NV ADR |
Pekin Life and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pekin Life and Aegon NV
The main advantage of trading using opposite Pekin Life and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pekin Life 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.| Pekin Life vs. Invesco High Income | Pekin Life vs. Blackrock Muniholdings Ny | Pekin Life vs. MFS Investment Grade | Pekin Life vs. Federated Premier Municipal |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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