Correlation Between NN Group and Ageas SANV

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

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

Diversification Opportunities for NN Group and Ageas SANV

0.63

Correlation Coefficient

NN Group  Ageas SANV

Poor diversification

The 3 months correlation between NNGPF and Ageas is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding NN Group NV and ageas SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ageas SANV and NN Group 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 NN Group NV are associated (or correlated) with Ageas SANV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ageas SANV has no effect on the direction of NN Group i.e., NN Group and Ageas SANV go up and down completely randomly.

Pair Corralation between NN Group and Ageas SANV

Assuming the 90 days horizon NN Group NV is expected to under-perform the Ageas SANV. In addition to that, NN Group is 1.04 times more volatile than ageas SANV. It trades about -0.25 of its total potential returns per unit of risk. ageas SANV is currently generating about -0.16 per unit of volatility. If you would invest  5,193  in ageas SANV on September 12, 2024 and sell it today you would lose (220.00) from holding ageas SANV or give up 4.24% of portfolio value over 90 days.

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

NN Group NV  vs.  ageas SANV

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 latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ageas SANV

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 SANV is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NN Group and Ageas SANV

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

The idea behind NN Group NV and ageas SANV 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.