Correlation Between Avantis Short-term and Aig Government
Can any of the company-specific risk be diversified away by investing in both Avantis Short-term 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 Avantis Short-term and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avantis Short Term Fixed and Aig Government Money, you can compare the effects of market volatilities on Avantis Short-term 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 Avantis Short-term with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Short-term and Aig Government.
Diversification Opportunities for Avantis Short-term and Aig Government
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Avantis and Aig is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Short Term Fixed 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 Avantis Short-term 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 Avantis Short Term Fixed 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 Avantis Short-term i.e., Avantis Short-term and Aig Government go up and down completely randomly.
Pair Corralation between Avantis Short-term and Aig Government
Assuming the 90 days horizon Avantis Short-term is expected to generate 3.76 times less return on investment than Aig Government. But when comparing it to its historical volatility, Avantis Short Term Fixed is 1.95 times less risky than Aig Government. It trades about 0.08 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,006 in Aig Government Money on September 4, 2024 and sell it today you would earn a total of 8.00 from holding Aig Government Money or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avantis Short Term Fixed vs. Aig Government Money
Performance |
| Timeline |
| Avantis Short Term |
| Aig Government Money |
Avantis Short-term and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantis Short-term and Aig Government
The main advantage of trading using opposite Avantis Short-term and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Short-term 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.| Avantis Short-term vs. Aig Government Money | Avantis Short-term vs. Us Government Securities | Avantis Short-term vs. Fidelity Series Government | Avantis Short-term vs. Us Government Securities |
| Aig Government vs. Simt Multi Asset Accumulation | Aig Government vs. Saat Market Growth | Aig Government vs. Simt Real Return | Aig Government vs. Simt Small Cap |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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