Correlation Between Global Gold and Valic Company
Can any of the company-specific risk be diversified away by investing in both Global Gold 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 Global Gold and Valic Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Valic Company I, you can compare the effects of market volatilities on Global Gold 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 Global Gold with a short position of Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Valic Company.
Diversification Opportunities for Global Gold and Valic Company
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Valic is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund 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 Global Gold 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 Global Gold Fund 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 Global Gold i.e., Global Gold and Valic Company go up and down completely randomly.
Pair Corralation between Global Gold and Valic Company
Assuming the 90 days horizon Global Gold Fund is expected to generate 1.52 times more return on investment than Valic Company. However, Global Gold is 1.52 times more volatile than Valic Company I. It trades about -0.1 of its potential returns per unit of risk. Valic Company I is currently generating about -0.25 per unit of risk. If you would invest 1,286 in Global Gold Fund on October 11, 2024 and sell it today you would lose (51.00) from holding Global Gold Fund or give up 3.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Valic Company I
Performance |
| Timeline |
| Global Gold Fund |
| Valic Company I |
Global Gold and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Valic Company
The main advantage of trading using opposite Global Gold and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold 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.| Global Gold vs. Issachar Fund Class | Global Gold vs. Rationalpier 88 Convertible | Global Gold vs. Eic Value Fund | Global Gold vs. Locorr Market Trend |
| Valic Company vs. International Investors Gold | Valic Company vs. Global Gold Fund | Valic Company vs. James Balanced Golden | Valic Company vs. Oppenheimer Gold Special |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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