Correlation Between Invesco Gold and Aig Government
Can any of the company-specific risk be diversified away by investing in both Invesco Gold 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 Invesco Gold and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Gold Special and Aig Government Money, you can compare the effects of market volatilities on Invesco Gold 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 Invesco Gold with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Gold and Aig Government.
Diversification Opportunities for Invesco Gold and Aig Government
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Invesco and Aig is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Gold Special 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 Invesco Gold 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 Invesco Gold Special 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 Invesco Gold i.e., Invesco Gold and Aig Government go up and down completely randomly.
Pair Corralation between Invesco Gold and Aig Government
Assuming the 90 days horizon Invesco Gold Special is expected to generate 8.31 times more return on investment than Aig Government. However, Invesco Gold is 8.31 times more volatile than Aig Government Money. It trades about 0.29 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.1 per unit of risk. If you would invest 2,564 in Invesco Gold Special on October 20, 2024 and sell it today you would earn a total of 186.00 from holding Invesco Gold Special or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Gold Special vs. Aig Government Money
Performance |
| Timeline |
| Invesco Gold Special |
| Aig Government Money |
Invesco Gold and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Gold and Aig Government
The main advantage of trading using opposite Invesco Gold and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Gold 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.| Invesco Gold vs. Goldman Sachs Clean | Invesco Gold vs. Gabelli Gold Fund | Invesco Gold vs. Precious Metals And | Invesco Gold vs. James Balanced Golden |
| Aig Government vs. Invesco Gold Special | Aig Government vs. Great West Goldman Sachs | Aig Government vs. Franklin Gold Precious | Aig Government vs. World Precious Minerals |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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