Correlation Between Nationwide Inflation-protec and Aig Government
Can any of the company-specific risk be diversified away by investing in both Nationwide Inflation-protec 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 Nationwide Inflation-protec and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Inflation Protected Securities and Aig Government Money, you can compare the effects of market volatilities on Nationwide Inflation-protec 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 Nationwide Inflation-protec with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Inflation-protec and Aig Government.
Diversification Opportunities for Nationwide Inflation-protec and Aig Government
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NATIONWIDE and Aig is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Inflation Protected 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 Nationwide Inflation-protec 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 Nationwide Inflation Protected Securities 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 Nationwide Inflation-protec i.e., Nationwide Inflation-protec and Aig Government go up and down completely randomly.
Pair Corralation between Nationwide Inflation-protec and Aig Government
Assuming the 90 days horizon Nationwide Inflation-protec is expected to generate 1.1 times less return on investment than Aig Government. In addition to that, Nationwide Inflation-protec is 1.04 times more volatile than Aig Government Money. It trades about 0.16 of its total potential returns per unit of risk. Aig Government Money is currently generating about 0.19 per unit of volatility. If you would invest 1,004 in Aig Government Money on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Aig Government Money or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Inflation Protected vs. Aig Government Money
Performance |
| Timeline |
| Nationwide Inflation-protec |
| Aig Government Money |
Nationwide Inflation-protec and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Inflation-protec and Aig Government
The main advantage of trading using opposite Nationwide Inflation-protec and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Inflation-protec 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.The idea behind Nationwide Inflation Protected Securities and Aig Government Money 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.
| Aig Government vs. Artisan Thematic Fund | Aig Government vs. Growth Opportunities Fund | Aig Government vs. Volumetric Fund Volumetric | Aig Government vs. Small Cap Stock |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |