Correlation Between Empire State and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Empire State and Aegon 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 Empire State and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Aegon NV ADR, you can compare the effects of market volatilities on Empire State and Aegon 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 Empire State with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Aegon NV.
Diversification Opportunities for Empire State and Aegon NV
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and Aegon is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Aegon NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV ADR and Empire State 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 Empire State Realty are associated (or correlated) with Aegon NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon NV ADR has no effect on the direction of Empire State i.e., Empire State and Aegon NV go up and down completely randomly.
Pair Corralation between Empire State and Aegon NV
Given the investment horizon of 90 days Empire State Realty is expected to generate 45.43 times more return on investment than Aegon NV. However, Empire State is 45.43 times more volatile than Aegon NV ADR. It trades about 0.06 of its potential returns per unit of risk. Aegon NV ADR is currently generating about 0.03 per unit of risk. If you would invest 986.00 in Empire State Realty on October 7, 2024 and sell it today you would earn a total of 31.00 from holding Empire State Realty or generate 3.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 92.95% |
Values | Daily Returns |
Empire State Realty vs. Aegon NV ADR
Performance |
Timeline |
Empire State Realty |
Aegon NV ADR |
Empire State and Aegon NV Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Empire State and Aegon NV
The main advantage of trading using opposite Empire State and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Aegon 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 Aegon NV will offset losses from the drop in Aegon NV's long position.Empire State vs. Empire State Realty | Empire State vs. City Office | Empire State vs. Cousins Properties Incorporated | Empire State vs. Postal Realty Trust |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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