Correlation Between Ageas SA/NV and NN Group

Can any of the company-specific risk be diversified away by investing in both Ageas SA/NV and NN Group 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 Ageas SA/NV and NN Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ageas SANV and NN Group NV, you can compare the effects of market volatilities on Ageas SA/NV and NN Group 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 Ageas SA/NV with a short position of NN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ageas SA/NV and NN Group.

Diversification Opportunities for Ageas SA/NV and NN Group

0.37

Correlation Coefficient

Ageas SA/NV  NN Group

Weak diversification

The 3 months correlation between Ageas and NNGPF is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding ageas SANV and NN Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NN Group NV and Ageas SA/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 ageas SANV are associated (or correlated) with NN Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NN Group NV has no effect on the direction of Ageas SA/NV i.e., Ageas SA/NV and NN Group go up and down completely randomly.

Pair Corralation between Ageas SA/NV and NN Group

Assuming the 90 days horizon ageas SANV is expected to generate 0.89 times more return on investment than NN Group. However, ageas SANV is 1.12 times less risky than NN Group. It trades about -0.01 of its potential returns per unit of risk. NN Group NV is currently generating about -0.05 per unit of risk. If you would invest  5,128  in ageas SANV on August 31, 2024 and sell it today you would lose (54.00) from holding ageas SANV or give up 1.05% of portfolio value over 90 days.

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

ageas SANV  vs.  NN Group NV

Ageas SA/NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ageas SANV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Ageas SA/NV is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

NN Group NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NN Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NN Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ageas SA/NV and NN Group

The main advantage of trading using opposite Ageas SA/NV and NN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ageas SA/NV position performs unexpectedly, NN Group 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 NN Group will offset losses from the drop in NN Group's long position.

The idea behind ageas SANV and NN Group 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.