Correlation Between Great-west Aggressive and Great-west Lifetime
Can any of the company-specific risk be diversified away by investing in both Great-west Aggressive and Great-west Lifetime 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 Great-west Aggressive and Great-west Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Aggressive Profile and Great West Lifetime 2050, you can compare the effects of market volatilities on Great-west Aggressive and Great-west Lifetime 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 Great-west Aggressive with a short position of Great-west Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great-west Aggressive and Great-west Lifetime.
Diversification Opportunities for Great-west Aggressive and Great-west Lifetime
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Great-west and Great-west is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Great West Aggressive Profile and Great West Lifetime 2050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifetime and Great-west Aggressive 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 Great West Aggressive Profile are associated (or correlated) with Great-west Lifetime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifetime has no effect on the direction of Great-west Aggressive i.e., Great-west Aggressive and Great-west Lifetime go up and down completely randomly.
Pair Corralation between Great-west Aggressive and Great-west Lifetime
Assuming the 90 days horizon Great West Aggressive Profile is expected to generate 1.06 times more return on investment than Great-west Lifetime. However, Great-west Aggressive is 1.06 times more volatile than Great West Lifetime 2050. It trades about 0.06 of its potential returns per unit of risk. Great West Lifetime 2050 is currently generating about 0.06 per unit of risk. If you would invest 512.00 in Great West Aggressive Profile on August 31, 2024 and sell it today you would earn a total of 94.00 from holding Great West Aggressive Profile or generate 18.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Aggressive Profile vs. Great West Lifetime 2050
Performance |
| Timeline |
| Great West Aggressive |
| Great West Lifetime |
Great-west Aggressive and Great-west Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great-west Aggressive and Great-west Lifetime
The main advantage of trading using opposite Great-west Aggressive and Great-west Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great-west Aggressive position performs unexpectedly, Great-west Lifetime 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 Great-west Lifetime will offset losses from the drop in Great-west Lifetime's long position.The idea behind Great West Aggressive Profile and Great West Lifetime 2050 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Great-west Lifetime vs. Absolute Convertible Arbitrage | Great-west Lifetime vs. Putnam Convertible Incm Gwth | Great-west Lifetime vs. The Gamco Global | Great-west Lifetime vs. Allianzgi Convertible Income |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |