Correlation Between Ab Equity and Aig Government
Can any of the company-specific risk be diversified away by investing in both Ab Equity 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 Ab Equity and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Equity Income and Aig Government Money, you can compare the effects of market volatilities on Ab Equity 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 Ab Equity with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Equity and Aig Government.
Diversification Opportunities for Ab Equity and Aig Government
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AUIAX and Aig is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ab Equity Income 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 Ab Equity 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 Equity Income 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 Ab Equity i.e., Ab Equity and Aig Government go up and down completely randomly.
Pair Corralation between Ab Equity and Aig Government
Assuming the 90 days horizon Ab Equity Income is expected to under-perform the Aig Government. In addition to that, Ab Equity is 8.82 times more volatile than Aig Government Money. It trades about -0.26 of its total potential returns per unit of risk. Aig Government Money is currently generating about -0.29 per unit of volatility. If you would invest 1,018 in Aig Government Money on October 11, 2024 and sell it today you would lose (13.00) from holding Aig Government Money or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ab Equity Income vs. Aig Government Money
Performance |
| Timeline |
| Ab Equity Income |
| Aig Government Money |
Ab Equity and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Equity and Aig Government
The main advantage of trading using opposite Ab Equity and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Equity 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.| Ab Equity vs. Dws Emerging Markets | Ab Equity vs. Artisan Developing World | Ab Equity vs. Calvert Developed Market | Ab Equity vs. Locorr Market Trend |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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