Correlation Between Aegon NV and Sabre Insurance

Can any of the company-specific risk be diversified away by investing in both Aegon NV and Sabre Insurance 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 Sabre Insurance 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 Sabre Insurance Group, you can compare the effects of market volatilities on Aegon NV and Sabre Insurance 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 Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Sabre Insurance.

Diversification Opportunities for Aegon NV and Sabre Insurance

0.0

Correlation Coefficient

Aegon NV  Sabre Insurance

Pay attention - limited upside

The 3 months correlation between Aegon and Sabre is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Sabre Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Insurance Group 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 Sabre Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Insurance Group has no effect on the direction of Aegon NV i.e., Aegon NV and Sabre Insurance go up and down completely randomly.

Pair Corralation between Aegon NV and Sabre Insurance

Considering the 90-day investment horizon Aegon NV ADR is expected to generate 0.63 times more return on investment than Sabre Insurance. However, Aegon NV ADR is 1.58 times less risky than Sabre Insurance. It trades about 0.04 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about -0.03 per unit of risk. If you would invest  453.00  in Aegon NV ADR on September 19, 2024 and sell it today you would earn a total of  115.00  from holding Aegon NV ADR or generate 25.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Aegon NV ADR  vs.  Sabre Insurance Group

Aegon NV ADR

Risk-Adjusted Performance

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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.

Sabre Insurance Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sabre Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Sabre Insurance is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aegon NV and Sabre Insurance

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

The idea behind Aegon NV ADR and Sabre Insurance Group 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.