Correlation Between Aegon NV and WPP PLC
Can any of the company-specific risk be diversified away by investing in both Aegon NV and WPP PLC 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 WPP PLC 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 WPP PLC ADR, you can compare the effects of market volatilities on Aegon NV and WPP PLC 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 WPP PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and WPP PLC.
Diversification Opportunities for Aegon NV and WPP PLC
Very good diversification
The 3 months correlation between Aegon and WPP is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and WPP PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WPP PLC ADR 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 WPP PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WPP PLC ADR has no effect on the direction of Aegon NV i.e., Aegon NV and WPP PLC go up and down completely randomly.
Pair Corralation between Aegon NV and WPP PLC
Considering the 90-day investment horizon Aegon NV ADR is expected to generate 0.81 times more return on investment than WPP PLC. However, Aegon NV ADR is 1.24 times less risky than WPP PLC. It trades about 0.14 of its potential returns per unit of risk. WPP PLC ADR is currently generating about -0.17 per unit of risk. If you would invest 576.00 in Aegon NV ADR on December 19, 2024 and sell it today you would earn a total of 94.00 from holding Aegon NV ADR or generate 16.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Aegon NV ADR vs. WPP PLC ADR
Performance |
Timeline |
Aegon NV ADR |
WPP PLC ADR |
Aegon NV and WPP PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aegon NV and WPP PLC
The main advantage of trading using opposite Aegon NV and WPP PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, WPP PLC 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 WPP PLC will offset losses from the drop in WPP PLC'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 |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |