Correlation Between Ab Bond and Valic Company
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Valic Company 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 Ab Bond and Valic Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Valic Company I, you can compare the effects of market volatilities on Ab Bond and Valic Company 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 Ab Bond with a short position of Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Valic Company.
Diversification Opportunities for Ab Bond and Valic Company
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between ABNTX and Valic is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I and Ab Bond 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 Ab Bond Inflation are associated (or correlated) with Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Ab Bond i.e., Ab Bond and Valic Company go up and down completely randomly.
Pair Corralation between Ab Bond and Valic Company
Assuming the 90 days horizon Ab Bond is expected to generate 17.24 times less return on investment than Valic Company. But when comparing it to its historical volatility, Ab Bond Inflation is 2.95 times less risky than Valic Company. It trades about 0.03 of its potential returns per unit of risk. Valic Company I is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,443 in Valic Company I on August 31, 2024 and sell it today you would earn a total of 25.00 from holding Valic Company I or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Bond Inflation vs. Valic Company I
Performance |
| Timeline |
| Ab Bond Inflation |
| Valic Company I |
Ab Bond and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Valic Company
The main advantage of trading using opposite Ab Bond and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company's long position.| Ab Bond vs. Vanguard Short Term Inflation Protected | Ab Bond vs. HUMANA INC | Ab Bond vs. Aquagold International | Ab Bond vs. Barloworld Ltd ADR |
| Valic Company vs. Nationwide Growth Fund | Valic Company vs. Chase Growth Fund | Valic Company vs. Eip Growth And | Valic Company vs. Small Midcap Dividend Income |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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