Correlation Between Aegon NV and Mativ Holdings

Can any of the company-specific risk be diversified away by investing in both Aegon NV and Mativ Holdings 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 Aegon NV and Mativ Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aegon NV ADR and Mativ Holdings, you can compare the effects of market volatilities on Aegon NV and Mativ Holdings 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 Aegon NV with a short position of Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Mativ Holdings.

Diversification Opportunities for Aegon NV and Mativ Holdings

0.18

Correlation Coefficient

Aegon NV  Mativ Holdings

Average diversification

The 3 months correlation between Aegon and Mativ is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings and Aegon NV 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 Aegon NV ADR are associated (or correlated) with Mativ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mativ Holdings has no effect on the direction of Aegon NV i.e., Aegon NV and Mativ Holdings go up and down completely randomly.

Pair Corralation between Aegon NV and Mativ Holdings

Considering the 90-day investment horizon Aegon NV ADR is expected to generate 0.91 times more return on investment than Mativ Holdings. However, Aegon NV ADR is 1.1 times less risky than Mativ Holdings. It trades about -0.2 of its potential returns per unit of risk. Mativ Holdings is currently generating about -0.43 per unit of risk. If you would invest  629.00  in Aegon NV ADR on September 24, 2024 and sell it today you would lose (50.50) from holding Aegon NV ADR or give up 8.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aegon NV ADR  vs.  Mativ Holdings

Aegon NV ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aegon NV ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Mativ Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mativ Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Aegon NV and Mativ Holdings

The main advantage of trading using opposite Aegon NV and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Mativ Holdings 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 Mativ Holdings will offset losses from the drop in Mativ Holdings' long position.

The idea behind Aegon NV ADR and Mativ Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.