Correlation Between Leader Short-term and Aig Government
Can any of the company-specific risk be diversified away by investing in both Leader 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 Leader 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 Leader Short Term Bond and Aig Government Money, you can compare the effects of market volatilities on Leader 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 Leader Short-term with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leader Short-term and Aig Government.
Diversification Opportunities for Leader Short-term and Aig Government
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Leader and Aig is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Leader Short Term Bond 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 Leader 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 Leader Short Term Bond 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 Leader Short-term i.e., Leader Short-term and Aig Government go up and down completely randomly.
Pair Corralation between Leader Short-term and Aig Government
Assuming the 90 days horizon Leader Short-term is expected to generate 1.66 times less return on investment than Aig Government. But when comparing it to its historical volatility, Leader Short Term Bond is 3.2 times less risky than Aig Government. It trades about 0.22 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,004 in Aig Government Money on November 3, 2024 and sell it today you would earn a total of 4.00 from holding Aig Government Money or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leader Short Term Bond vs. Aig Government Money
Performance |
| Timeline |
| Leader Short Term |
| Aig Government Money |
Leader Short-term and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leader Short-term and Aig Government
The main advantage of trading using opposite Leader Short-term and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leader 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.| Leader Short-term vs. Schwab Government Money | Leader Short-term vs. Hsbc Government Money | Leader Short-term vs. Great West Government Mortgage | Leader Short-term vs. Voya Government Money |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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