Correlation Between AIA Group and FG Annuities
Can any of the company-specific risk be diversified away by investing in both AIA Group and FG Annuities 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 AIA Group and FG Annuities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIA Group Ltd and FG Annuities Life, you can compare the effects of market volatilities on AIA Group and FG Annuities 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 AIA Group with a short position of FG Annuities. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIA Group and FG Annuities.
Diversification Opportunities for AIA Group and FG Annuities
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between AIA and FG Annuities is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding AIA Group Ltd and FG Annuities Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Annuities Life and AIA 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 AIA Group Ltd are associated (or correlated) with FG Annuities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Annuities Life has no effect on the direction of AIA Group i.e., AIA Group and FG Annuities go up and down completely randomly.
Pair Corralation between AIA Group and FG Annuities
Assuming the 90 days horizon AIA Group Ltd is expected to under-perform the FG Annuities. But the pink sheet apears to be less risky and, when comparing its historical volatility, AIA Group Ltd is 2.38 times less risky than FG Annuities. The pink sheet trades about -0.3 of its potential returns per unit of risk. The FG Annuities Life is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 4,166 in FG Annuities Life on August 27, 2024 and sell it today you would earn a total of 677.00 from holding FG Annuities Life or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIA Group Ltd vs. FG Annuities Life
Performance |
| Timeline |
| AIA Group |
| FG Annuities Life |
AIA Group and FG Annuities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIA Group and FG Annuities
The main advantage of trading using opposite AIA Group and FG Annuities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIA Group position performs unexpectedly, FG Annuities 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 FG Annuities will offset losses from the drop in FG Annuities' long position.| AIA Group vs. CNO Financial Group | AIA Group vs. Genworth Financial | AIA Group vs. MetLife Preferred Stock | AIA Group vs. Prudential Public Limited |
| FG Annuities vs. Morningstar Unconstrained Allocation | FG Annuities vs. Via Renewables | FG Annuities vs. Sitka Gold Corp | FG Annuities vs. MSCI ACWI exAUCONSUMER |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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