Correlation Between Tandem Diabetes and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Tandem Diabetes 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 Tandem Diabetes and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tandem Diabetes Care and Aegon NV ADR, you can compare the effects of market volatilities on Tandem Diabetes 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 Tandem Diabetes with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tandem Diabetes and Aegon NV.
Diversification Opportunities for Tandem Diabetes and Aegon NV
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tandem and Aegon is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tandem Diabetes Care 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 Tandem Diabetes 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 Tandem Diabetes Care 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 Tandem Diabetes i.e., Tandem Diabetes and Aegon NV go up and down completely randomly.
Pair Corralation between Tandem Diabetes and Aegon NV
Given the investment horizon of 90 days Tandem Diabetes Care is expected to under-perform the Aegon NV. In addition to that, Tandem Diabetes is 2.28 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 0.1 per unit of volatility. If you would invest 628.00 in Aegon NV ADR on September 1, 2024 and sell it today you would earn a total of 21.00 from holding Aegon NV ADR or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tandem Diabetes Care vs. Aegon NV ADR
Performance |
| Timeline |
| Tandem Diabetes Care |
| Aegon NV ADR |
Tandem Diabetes and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tandem Diabetes and Aegon NV
The main advantage of trading using opposite Tandem Diabetes and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tandem Diabetes 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.| Tandem Diabetes vs. Profound Medical Corp | Tandem Diabetes vs. Si Bone | Tandem Diabetes vs. Nevro Corp | Tandem Diabetes vs. Paragon 28 |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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