Correlation Between Randstad and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Randstad 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 Randstad and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Randstad NV and Aegon NV, you can compare the effects of market volatilities on Randstad 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 Randstad with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Randstad and Aegon NV.
Diversification Opportunities for Randstad and Aegon NV
Significant diversification
The 3 months correlation between Randstad and Aegon is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Randstad NV and Aegon NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV and Randstad 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 Randstad NV 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 has no effect on the direction of Randstad i.e., Randstad and Aegon NV go up and down completely randomly.
Pair Corralation between Randstad and Aegon NV
Assuming the 90 days trading horizon Randstad NV is expected to under-perform the Aegon NV. In addition to that, Randstad is 1.06 times more volatile than Aegon NV. It trades about -0.06 of its total potential returns per unit of risk. Aegon NV is currently generating about 0.06 per unit of volatility. If you would invest 554.00 in Aegon NV on September 2, 2024 and sell it today you would earn a total of 56.00 from holding Aegon NV or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Randstad NV vs. Aegon NV
Performance |
| Timeline |
| Randstad NV |
| Aegon NV |
Randstad and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Randstad and Aegon NV
The main advantage of trading using opposite Randstad and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Randstad 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.| Randstad vs. Akzo Nobel NV | Randstad vs. Koninklijke KPN NV | Randstad vs. Aegon NV | Randstad vs. Wolters Kluwer NV |
| Aegon NV vs. ING Groep NV | Aegon NV vs. Koninklijke KPN NV | Aegon NV vs. ABN Amro Group | Aegon NV vs. NN Group NV |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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