Correlation Between Northern Funds and Aig Government
Can any of the company-specific risk be diversified away by investing in both Northern Funds 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 Northern Funds and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Funds and Aig Government Money, you can compare the effects of market volatilities on Northern Funds 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 Northern Funds with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Funds and Aig Government.
Diversification Opportunities for Northern Funds and Aig Government
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Northern and Aig is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Northern Funds 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 Northern Funds 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 Northern Funds 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 Northern Funds i.e., Northern Funds and Aig Government go up and down completely randomly.
Pair Corralation between Northern Funds and Aig Government
If you would invest 1,009 in Aig Government Money on September 20, 2024 and sell it today you would earn a total of 0.00 from holding Aig Government Money or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Northern Funds vs. Aig Government Money
Performance |
| Timeline |
| Northern Funds |
| Aig Government Money |
Northern Funds and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Funds and Aig Government
The main advantage of trading using opposite Northern Funds and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Funds 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.| Northern Funds vs. Pace High Yield | Northern Funds vs. Ab High Income | Northern Funds vs. Artisan High Income | Northern Funds vs. Morningstar Aggressive Growth |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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