Correlation Between Prudential Government and Aig Government
Can any of the company-specific risk be diversified away by investing in both Prudential Government 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 Prudential Government and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Government Money and Aig Government Money, you can compare the effects of market volatilities on Prudential Government 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 Prudential Government with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Government and Aig Government.
Diversification Opportunities for Prudential Government and Aig Government
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Prudential and Aig is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Government Money 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 Prudential Government 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 Prudential Government Money 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 Prudential Government i.e., Prudential Government and Aig Government go up and down completely randomly.
Pair Corralation between Prudential Government and Aig Government
If you would invest 1,005 in Aig Government Money on November 4, 2024 and sell it today you would earn a total of 3.00 from holding Aig Government Money or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Government Money vs. Aig Government Money
Performance |
| Timeline |
| Prudential Government |
| Aig Government Money |
Prudential Government and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Government and Aig Government
The main advantage of trading using opposite Prudential Government and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Government 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.| Prudential Government vs. Vy Clarion Real | Prudential Government vs. Prudential Real Estate | Prudential Government vs. Fidelity Real Estate | Prudential Government vs. Texton Property |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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