Correlation Between 33938XAC9 and Aegon NV

Can any of the company-specific risk be diversified away by investing in both 33938XAC9 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 33938XAC9 and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US33938XAC92 and Aegon NV ADR, you can compare the effects of market volatilities on 33938XAC9 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 33938XAC9 with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of 33938XAC9 and Aegon NV.

Diversification Opportunities for 33938XAC9 and Aegon NV

-0.2

Correlation Coefficient

33938XAC9  Aegon NV

Good diversification

The 3 months correlation between 33938XAC9 and Aegon is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding US33938XAC92 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 33938XAC9 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 US33938XAC92 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 33938XAC9 i.e., 33938XAC9 and Aegon NV go up and down completely randomly.

Pair Corralation between 33938XAC9 and Aegon NV

Assuming the 90 days trading horizon US33938XAC92 is expected to under-perform the Aegon NV. But the bond apears to be less risky and, when comparing its historical volatility, US33938XAC92 is 3.61 times less risky than Aegon NV. The bond trades about -0.15 of its potential returns per unit of risk. The Aegon NV ADR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  600.00  in Aegon NV ADR on September 17, 2024 and sell it today you would earn a total of  31.00  from holding Aegon NV ADR or generate 5.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

US33938XAC92  vs.  Aegon NV ADR

US33938XAC92

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US33938XAC92 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 33938XAC9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aegon NV ADR

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aegon NV ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with 33938XAC9 and Aegon NV

The main advantage of trading using opposite 33938XAC9 and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 33938XAC9 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 US33938XAC92 and Aegon NV ADR 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.