Correlation Between Steel Dynamics and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics 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 Steel Dynamics and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Aegon NV, you can compare the effects of market volatilities on Steel Dynamics 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 Steel Dynamics with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Aegon NV.
Diversification Opportunities for Steel Dynamics and Aegon NV
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Steel and Aegon is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Aegon NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV and Steel Dynamics 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 Steel Dynamics 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 Steel Dynamics i.e., Steel Dynamics and Aegon NV go up and down completely randomly.
Pair Corralation between Steel Dynamics and Aegon NV
If you would invest 13,358 in Steel Dynamics on September 5, 2024 and sell it today you would earn a total of 780.00 from holding Steel Dynamics or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Steel Dynamics vs. Aegon NV
Performance |
| Timeline |
| Steel Dynamics |
| Aegon NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Steel Dynamics and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Aegon NV
The main advantage of trading using opposite Steel Dynamics and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics 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.| Steel Dynamics vs. Cleveland Cliffs | Steel Dynamics vs. United States Steel | Steel Dynamics vs. ArcelorMittal SA ADR | Steel Dynamics vs. Reliance Steel Aluminum |
| Aegon NV vs. CECO Environmental Corp | Aegon NV vs. Omni Health | Aegon NV vs. Sonida Senior Living | Aegon NV vs. Franklin Credit Management |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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