Correlation Between Horizon Active and Aig Government
Can any of the company-specific risk be diversified away by investing in both Horizon Active and Aig Government 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 Horizon Active and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horizon Active Risk and Aig Government Money, you can compare the effects of market volatilities on Horizon Active and Aig Government 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 Horizon Active with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Active and Aig Government.
Diversification Opportunities for Horizon Active and Aig Government
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Horizon and Aig is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Active Risk and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money and Horizon Active 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 Horizon Active Risk are associated (or correlated) with Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Horizon Active i.e., Horizon Active and Aig Government go up and down completely randomly.
Pair Corralation between Horizon Active and Aig Government
Assuming the 90 days horizon Horizon Active Risk is expected to generate 3.83 times more return on investment than Aig Government. However, Horizon Active is 3.83 times more volatile than Aig Government Money. It trades about 0.09 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.05 per unit of risk. If you would invest 1,996 in Horizon Active Risk on September 12, 2024 and sell it today you would earn a total of 742.00 from holding Horizon Active Risk or generate 37.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Horizon Active Risk vs. Aig Government Money
Performance |
| Timeline |
| Horizon Active Risk |
| Aig Government Money |
Horizon Active and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Active and Aig Government
The main advantage of trading using opposite Horizon Active and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Active position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.| Horizon Active vs. Wilmington Trust Retirement | Horizon Active vs. Pro Blend Moderate Term | Horizon Active vs. Saat Moderate Strategy | Horizon Active vs. Qs Moderate Growth |
| Aig Government vs. SCOR PK | Aig Government vs. Morningstar Unconstrained Allocation | Aig Government vs. Via Renewables | Aig Government vs. Bondbloxx ETF Trust |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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