Correlation Between Ageas SANV and VGP NV

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

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

Diversification Opportunities for Ageas SANV and VGP NV

0.73

Correlation Coefficient

Ageas SANV  VGP NV

Poor diversification

The 3 months correlation between Ageas and VGP is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding ageas SANV and VGP NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VGP NV and Ageas SANV 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 ageas SANV are associated (or correlated) with VGP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VGP NV has no effect on the direction of Ageas SANV i.e., Ageas SANV and VGP NV go up and down completely randomly.

Pair Corralation between Ageas SANV and VGP NV

Assuming the 90 days trading horizon ageas SANV is expected to generate 0.56 times more return on investment than VGP NV. However, ageas SANV is 1.77 times less risky than VGP NV. It trades about 0.34 of its potential returns per unit of risk. VGP NV is currently generating about 0.13 per unit of risk. If you would invest  4,636  in ageas SANV on December 28, 2024 and sell it today you would earn a total of  979.00  from holding ageas SANV or generate 21.12% return on investment over 90 days.

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

ageas SANV  vs.  VGP NV

ageas SANV

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in ageas SANV are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Ageas SANV reported solid returns over the last few months and may actually be approaching a breakup point.

VGP NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VGP NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, VGP NV reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ageas SANV and VGP NV

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

The idea behind ageas SANV and VGP NV 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.