Correlation Between Aegon NV and ASM International

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

By analyzing existing cross correlation between Aegon NV and ASM International NV, you can compare the effects of market volatilities on Aegon NV and ASM International 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 ASM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and ASM International.

Diversification Opportunities for Aegon NV and ASM International

-0.73

Correlation Coefficient

Aegon NV  ASM International

Pay attention - limited upside

The 3 months correlation between Aegon and ASM is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV and ASM International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM International 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 are associated (or correlated) with ASM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM International has no effect on the direction of Aegon NV i.e., Aegon NV and ASM International go up and down completely randomly.

Pair Corralation between Aegon NV and ASM International

Assuming the 90 days trading horizon Aegon NV is expected to generate 0.48 times more return on investment than ASM International. However, Aegon NV is 2.1 times less risky than ASM International. It trades about 0.14 of its potential returns per unit of risk. ASM International NV is currently generating about -0.03 per unit of risk. If you would invest  543.00  in Aegon NV on September 14, 2024 and sell it today you would earn a total of  64.00  from holding Aegon NV or generate 11.79% return on investment over 90 days.

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

Aegon NV  vs.  ASM International NV

Aegon NV

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aegon NV are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aegon NV may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ASM International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASM International NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, ASM International is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aegon NV and ASM International

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

The idea behind Aegon NV and ASM International 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.