Correlation Between Aegon NV and Greenlight Cap

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Can any of the company-specific risk be diversified away by investing in both Aegon NV and Greenlight Cap 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 Greenlight Cap 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 Greenlight Cap Re, you can compare the effects of market volatilities on Aegon NV and Greenlight Cap 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 Greenlight Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Greenlight Cap.

Diversification Opportunities for Aegon NV and Greenlight Cap

0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between Aegon and Greenlight is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Greenlight Cap Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenlight Cap Re 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 Greenlight Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenlight Cap Re has no effect on the direction of Aegon NV i.e., Aegon NV and Greenlight Cap go up and down completely randomly.

Pair Corralation between Aegon NV and Greenlight Cap

Considering the 90-day investment horizon Aegon NV ADR is expected to under-perform the Greenlight Cap. In addition to that, Aegon NV is 2.06 times more volatile than Greenlight Cap Re. It trades about -0.04 of its total potential returns per unit of risk. Greenlight Cap Re is currently generating about -0.02 per unit of volatility. If you would invest  768.00  in Greenlight Cap Re on June 27, 2022 and sell it today you would lose (15.00)  from holding Greenlight Cap Re or give up 1.95% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Aegon NV ADR  vs.  Greenlight Cap Re

 Performance (%) 
       Timeline  
Aegon NV ADR 
Aegon Performance
0 of 100
Over the last 90 days Aegon NV ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Aegon Price Channel

Greenlight Cap Re 
Greenlight Performance
0 of 100
Over the last 90 days Greenlight Cap Re has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Greenlight Cap is not utilizing all of its potentials. The new stock price tumult, may contribute to shorter-term losses for the shareholders.

Greenlight Price Channel

Aegon NV and Greenlight Cap Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aegon NV and Greenlight Cap

The main advantage of trading using opposite Aegon NV and Greenlight Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Greenlight Cap 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 Greenlight Cap will offset losses from the drop in Greenlight Cap's long position.
Aegon NV vs. BUSHVELD MINERALS LTD
The idea behind Aegon NV ADR and Greenlight Cap Re 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.
Greenlight Cap vs. Sigma Lithium Corp
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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