Correlation Between HAL Trust and Aegon NV

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

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

Diversification Opportunities for HAL Trust and Aegon NV

0.58

Correlation Coefficient

HAL Trust  Aegon NV

Very weak diversification

The 3 months correlation between HAL and Aegon is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding HAL Trust and Aegon NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV and HAL Trust 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 HAL Trust 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 has no effect on the direction of HAL Trust i.e., HAL Trust and Aegon NV go up and down completely randomly.

Pair Corralation between HAL Trust and Aegon NV

Assuming the 90 days trading horizon HAL Trust is expected to generate 1.67 times less return on investment than Aegon NV. But when comparing it to its historical volatility, HAL Trust is 2.77 times less risky than Aegon NV. It trades about 0.03 of its potential returns per unit of risk. Aegon NV is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  590.00  in Aegon NV on November 28, 2024 and sell it today you would earn a total of  4.00  from holding Aegon NV or generate 0.68% return on investment over 90 days.

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

HAL Trust  vs.  Aegon NV

HAL Trust

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HAL Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, HAL Trust is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Aegon NV

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aegon NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Aegon NV is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with HAL Trust and Aegon NV

The main advantage of trading using opposite HAL Trust and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAL Trust 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.

The idea behind HAL Trust and Aegon 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.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.