Correlation Between Auer Growth and Valic Company
Can any of the company-specific risk be diversified away by investing in both Auer Growth 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 Auer Growth and Valic Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auer Growth Fund and Valic Company I, you can compare the effects of market volatilities on Auer Growth 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 Auer Growth with a short position of Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and Valic Company.
Diversification Opportunities for Auer Growth and Valic Company
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Auer and Valic is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth 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 Auer Growth 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 Auer Growth 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 Auer Growth i.e., Auer Growth and Valic Company go up and down completely randomly.
Pair Corralation between Auer Growth and Valic Company
Assuming the 90 days horizon Auer Growth Fund is expected to generate 1.86 times more return on investment than Valic Company. However, Auer Growth is 1.86 times more volatile than Valic Company I. It trades about -0.01 of its potential returns per unit of risk. Valic Company I is currently generating about -0.12 per unit of risk. If you would invest 1,729 in Auer Growth Fund on September 13, 2024 and sell it today you would lose (5.00) from holding Auer Growth Fund or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auer Growth Fund vs. Valic Company I
Performance |
| Timeline |
| Auer Growth Fund |
| Valic Company I |
Auer Growth and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and Valic Company
The main advantage of trading using opposite Auer Growth and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth 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.| Auer Growth vs. Lebenthal Lisanti Small | Auer Growth vs. Hodges Small Cap | Auer Growth vs. Schwartz Value Focused | Auer Growth vs. Oberweis Small Cap Opportunities |
| Valic Company vs. Ab Bond Inflation | Valic Company vs. Simt Multi Asset Inflation | Valic Company vs. Goldman Sachs Inflation | Valic Company vs. Blackrock Inflation Protected |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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