Correlation Between Wabash National and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Wabash National 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 Wabash National and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wabash National and Aegon NV ADR, you can compare the effects of market volatilities on Wabash National 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 Wabash National with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabash National and Aegon NV.
Diversification Opportunities for Wabash National and Aegon NV
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wabash and Aegon is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Wabash National 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 Wabash National 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 Wabash National 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 Wabash National i.e., Wabash National and Aegon NV go up and down completely randomly.
Pair Corralation between Wabash National and Aegon NV
Considering the 90-day investment horizon Wabash National is expected to under-perform the Aegon NV. In addition to that, Wabash National is 1.3 times more volatile than Aegon NV ADR. It trades about -0.39 of its total potential returns per unit of risk. Aegon NV ADR is currently generating about -0.07 per unit of volatility. If you would invest 654.00 in Aegon NV ADR on November 29, 2024 and sell it today you would lose (27.00) from holding Aegon NV ADR or give up 4.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wabash National vs. Aegon NV ADR
Performance |
| Timeline |
| Wabash National |
| Aegon NV ADR |
Wabash National and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wabash National and Aegon NV
The main advantage of trading using opposite Wabash National and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabash National 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.| Wabash National vs. Rev Group | Wabash National vs. Gencor Industries | Wabash National vs. Alamo Group | Wabash National vs. Columbus McKinnon |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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