Correlation Between Omni Small and Valic Company
Can any of the company-specific risk be diversified away by investing in both Omni Small 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 Omni Small and Valic Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omni Small Cap Value and Valic Company I, you can compare the effects of market volatilities on Omni Small 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 Omni Small with a short position of Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Small and Valic Company.
Diversification Opportunities for Omni Small and Valic Company
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Omni and Valic is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Omni Small Cap Value 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 Omni Small 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 Omni Small Cap Value 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 Omni Small i.e., Omni Small and Valic Company go up and down completely randomly.
Pair Corralation between Omni Small and Valic Company
Assuming the 90 days horizon Omni Small Cap Value is expected to under-perform the Valic Company. In addition to that, Omni Small is 4.4 times more volatile than Valic Company I. It trades about -0.21 of its total potential returns per unit of risk. Valic Company I is currently generating about -0.12 per unit of volatility. If you would invest 1,299 in Valic Company I on September 13, 2024 and sell it today you would lose (14.00) from holding Valic Company I or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omni Small Cap Value vs. Valic Company I
Performance |
| Timeline |
| Omni Small Cap |
| Valic Company I |
Omni Small and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omni Small and Valic Company
The main advantage of trading using opposite Omni Small and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Small 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.| Omni Small vs. Pax High Yield | Omni Small vs. Buffalo High Yield | Omni Small vs. Guggenheim High Yield | Omni Small vs. Prudential High Yield |
| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |