Correlation Between Transamerica Inflation and Aig Government
Can any of the company-specific risk be diversified away by investing in both Transamerica Inflation 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 Transamerica Inflation and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Inflation Opportunities and Aig Government Money, you can compare the effects of market volatilities on Transamerica Inflation 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 Transamerica Inflation with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Inflation and Aig Government.
Diversification Opportunities for Transamerica Inflation and Aig Government
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Transamerica and Aig is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Inflation Opportu 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 Transamerica Inflation 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 Transamerica Inflation Opportunities 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 Transamerica Inflation i.e., Transamerica Inflation and Aig Government go up and down completely randomly.
Pair Corralation between Transamerica Inflation and Aig Government
Assuming the 90 days horizon Transamerica Inflation Opportunities is expected to generate 1.71 times more return on investment than Aig Government. However, Transamerica Inflation is 1.71 times more volatile than Aig Government Money. It trades about 0.05 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 911.00 in Transamerica Inflation Opportunities on September 3, 2024 and sell it today you would earn a total of 69.00 from holding Transamerica Inflation Opportunities or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Inflation Opportu vs. Aig Government Money
Performance |
| Timeline |
| Transamerica Inflation |
| Aig Government Money |
Transamerica Inflation and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Inflation and Aig Government
The main advantage of trading using opposite Transamerica Inflation and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Inflation 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.| Transamerica Inflation vs. Aig Government Money | Transamerica Inflation vs. Transamerica Funds | Transamerica Inflation vs. Blackrock Exchange Portfolio | Transamerica Inflation vs. John Hancock Money |
| Aig Government vs. Vanguard Massachusetts Tax Exempt | Aig Government vs. Nuveen Massachusetts Municipal | Aig Government vs. Nuveen Massachusetts Municipal | Aig Government vs. Mfs Massachusetts Municipal |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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