Correlation Between Aegon NV and HUNTINGTON

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

Diversification Opportunities for Aegon NV and HUNTINGTON

0.41

Correlation Coefficient

Aegon NV  HUNTINGTON

Very weak diversification

The 3 months correlation between Aegon and HUNTINGTON is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and HUNTINGTON BANCSHARES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUNTINGTON BANCSHARES INC 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 HUNTINGTON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUNTINGTON BANCSHARES INC has no effect on the direction of Aegon NV i.e., Aegon NV and HUNTINGTON go up and down completely randomly.

Pair Corralation between Aegon NV and HUNTINGTON

Considering the 90-day investment horizon Aegon NV ADR is expected to under-perform the HUNTINGTON. In addition to that, Aegon NV is 20.13 times more volatile than HUNTINGTON BANCSHARES INC. It trades about -0.2 of its total potential returns per unit of risk. HUNTINGTON BANCSHARES INC is currently generating about 0.05 per unit of volatility. If you would invest  9,969  in HUNTINGTON BANCSHARES INC on October 8, 2024 and sell it today you would earn a total of  6.00  from holding HUNTINGTON BANCSHARES INC or generate 0.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	84.21%
Values	Daily Returns

Aegon NV ADR  vs.  HUNTINGTON BANCSHARES INC

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 nearly stable technical and fundamental indicators, Aegon NV is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

HUNTINGTON BANCSHARES INC

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HUNTINGTON BANCSHARES INC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, HUNTINGTON is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aegon NV and HUNTINGTON

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

The idea behind Aegon NV ADR and HUNTINGTON BANCSHARES INC 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.