Correlation Between Federated Government and Aig Government
Can any of the company-specific risk be diversified away by investing in both Federated Government 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 Federated Government and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Government Ultrashort and Aig Government Money, you can compare the effects of market volatilities on Federated Government 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 Federated Government with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Government and Aig Government.
Diversification Opportunities for Federated Government and Aig Government
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Federated and Aig is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Federated Government Ultrashor 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 Federated Government 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 Federated Government Ultrashort 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 Federated Government i.e., Federated Government and Aig Government go up and down completely randomly.
Pair Corralation between Federated Government and Aig Government
Assuming the 90 days horizon Federated Government Ultrashort is expected to generate 0.54 times more return on investment than Aig Government. However, Federated Government Ultrashort is 1.86 times less risky than Aig Government. It trades about 0.2 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 884.00 in Federated Government Ultrashort on November 27, 2024 and sell it today you would earn a total of 93.00 from holding Federated Government Ultrashort or generate 10.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Government Ultrashor vs. Aig Government Money
Performance |
| Timeline |
| Federated Government |
| Aig Government Money |
Federated Government and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Government and Aig Government
The main advantage of trading using opposite Federated Government and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Government 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.| Federated Government vs. Jpmorgan Large Cap | Federated Government vs. M Large Cap | Federated Government vs. Tiaa Cref Large Cap Growth | Federated Government vs. Vest Large Cap |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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