Correlation Between Aegon NV and Safety Shot
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Safety Shot 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 Safety Shot 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 Safety Shot, you can compare the effects of market volatilities on Aegon NV and Safety Shot 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 Safety Shot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Safety Shot.
Diversification Opportunities for Aegon NV and Safety Shot
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aegon and Safety is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot 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 Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of Aegon NV i.e., Aegon NV and Safety Shot go up and down completely randomly.
Pair Corralation between Aegon NV and Safety Shot
Considering the 90-day investment horizon Aegon NV is expected to generate 4.27 times less return on investment than Safety Shot. But when comparing it to its historical volatility, Aegon NV ADR is 4.74 times less risky than Safety Shot. It trades about 0.04 of its potential returns per unit of risk. Safety Shot is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 77.00 in Safety Shot on September 23, 2024 and sell it today you would lose (5.00) from holding Safety Shot or give up 6.49% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aegon NV ADR vs. Safety Shot
Performance |
Timeline |
Aegon NV ADR |
Safety Shot |
Aegon NV and Safety Shot Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aegon NV and Safety Shot
The main advantage of trading using opposite Aegon NV and Safety Shot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Safety Shot 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 Safety Shot will offset losses from the drop in Safety Shot's long position.Aegon NV vs. Hartford Financial Services | Aegon NV vs. Goosehead Insurance | Aegon NV vs. International General Insurance | Aegon NV vs. Enstar Group Limited |
Safety Shot vs. Origin Materials | Safety Shot vs. Eastman Chemical | Safety Shot vs. Xiabuxiabu Catering Management | Safety Shot vs. Hudson Technologies |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |