Correlation Between Fortress Transp and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Fortress Transp 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 Fortress Transp and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Transp Infra and Aegon NV ADR, you can compare the effects of market volatilities on Fortress Transp 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 Fortress Transp with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Transp and Aegon NV.
Diversification Opportunities for Fortress Transp and Aegon NV
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fortress and Aegon is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transp Infra 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 Fortress Transp 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 Fortress Transp Infra 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 Fortress Transp i.e., Fortress Transp and Aegon NV go up and down completely randomly.
Pair Corralation between Fortress Transp and Aegon NV
Given the investment horizon of 90 days Fortress Transp is expected to generate 1.19 times less return on investment than Aegon NV. In addition to that, Fortress Transp is 2.05 times more volatile than Aegon NV ADR. It trades about 0.19 of its total potential returns per unit of risk. Aegon NV ADR is currently generating about 0.46 per unit of volatility. If you would invest 591.00 in Aegon NV ADR on February 14, 2024 and sell it today you would earn a total of 72.00 from holding Aegon NV ADR or generate 12.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Fortress Transp Infra vs. Aegon NV ADR
Performance |
Timeline |
Fortress Transp Infra |
Aegon NV ADR |
Fortress Transp and Aegon NV Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fortress Transp and Aegon NV
The main advantage of trading using opposite Fortress Transp and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Transp 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.Fortress Transp vs. The Aarons | Fortress Transp vs. Alta Equipment Group | Fortress Transp vs. GATX Corporation | Fortress Transp vs. Ryder System |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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