Correlation Between Ep Emerging and Aegon Funding

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

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

Diversification Opportunities for Ep Emerging and Aegon Funding

0.52

Correlation Coefficient

Ep Emerging  Aegon Funding

Very weak diversification

The 3 months correlation between EPASX and Aegon is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets and Aegon Funding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon Funding and Ep Emerging 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 Ep Emerging Markets are associated (or correlated) with Aegon Funding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon Funding has no effect on the direction of Ep Emerging i.e., Ep Emerging and Aegon Funding go up and down completely randomly.

Pair Corralation between Ep Emerging and Aegon Funding

Assuming the 90 days horizon Ep Emerging Markets is expected to generate 0.98 times more return on investment than Aegon Funding. However, Ep Emerging Markets is 1.02 times less risky than Aegon Funding. It trades about 0.13 of its potential returns per unit of risk. Aegon Funding is currently generating about 0.09 per unit of risk. If you would invest  972.00  in Ep Emerging Markets on July 6, 2024 and sell it today you would earn a total of  123.00  from holding Ep Emerging Markets or generate 12.65% return on investment over 90 days.

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

Ep Emerging Markets  vs.  Aegon Funding

Ep Emerging Markets

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ep Emerging Markets are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ep Emerging may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Aegon Funding

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aegon Funding are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Aegon Funding may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Pair Trading with Ep Emerging and Aegon Funding

The main advantage of trading using opposite Ep Emerging and Aegon Funding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ep Emerging position performs unexpectedly, Aegon Funding 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 Funding will offset losses from the drop in Aegon Funding's long position.

The idea behind Ep Emerging Markets and Aegon Funding 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.