Correlation Between Santech Holdings and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Santech Holdings 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 Santech Holdings and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santech Holdings Limited and Aegon NV ADR, you can compare the effects of market volatilities on Santech Holdings 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 Santech Holdings with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santech Holdings and Aegon NV.
Diversification Opportunities for Santech Holdings and Aegon NV
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Santech and Aegon is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Santech Holdings Limited 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 Santech Holdings 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 Santech Holdings Limited 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 Santech Holdings i.e., Santech Holdings and Aegon NV go up and down completely randomly.
Pair Corralation between Santech Holdings and Aegon NV
Given the investment horizon of 90 days Santech Holdings Limited is expected to generate 28.08 times more return on investment than Aegon NV. However, Santech Holdings is 28.08 times more volatile than Aegon NV ADR. It trades about 0.05 of its potential returns per unit of risk. Aegon NV ADR is currently generating about 0.06 per unit of risk. If you would invest 249.00 in Santech Holdings Limited on September 12, 2024 and sell it today you would lose (169.60) from holding Santech Holdings Limited or give up 68.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santech Holdings Limited vs. Aegon NV ADR
Performance |
| Timeline |
| Santech Holdings |
| Aegon NV ADR |
Santech Holdings and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santech Holdings and Aegon NV
The main advantage of trading using opposite Santech Holdings and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santech Holdings 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.| Santech Holdings vs. Diamond Hill Investment | Santech Holdings vs. AllianceBernstein Holding LP | Santech Holdings vs. Associated Capital Group | Santech Holdings vs. Bank of New |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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