Correlation Between Cref Inflation-linked and Aig Government
Can any of the company-specific risk be diversified away by investing in both Cref Inflation-linked 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 Cref Inflation-linked and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Inflation Linked Bond and Aig Government Money, you can compare the effects of market volatilities on Cref Inflation-linked 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 Cref Inflation-linked with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Inflation-linked and Aig Government.
Diversification Opportunities for Cref Inflation-linked and Aig Government
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cref and Aig is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Cref Inflation Linked 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 Cref Inflation-linked 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 Cref Inflation Linked 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 Cref Inflation-linked i.e., Cref Inflation-linked and Aig Government go up and down completely randomly.
Pair Corralation between Cref Inflation-linked and Aig Government
Assuming the 90 days trading horizon Cref Inflation-linked is expected to generate 1.07 times less return on investment than Aig Government. In addition to that, Cref Inflation-linked is 1.01 times more volatile than Aig Government Money. It trades about 0.12 of its total potential returns per unit of risk. Aig Government Money is currently generating about 0.13 per unit of volatility. If you would invest 983.00 in Aig Government Money on September 2, 2024 and sell it today you would earn a total of 31.00 from holding Aig Government Money or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cref Inflation Linked Bond vs. Aig Government Money
Performance |
| Timeline |
| Cref Inflation Linked |
| Aig Government Money |
Cref Inflation-linked and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Inflation-linked and Aig Government
The main advantage of trading using opposite Cref Inflation-linked and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Inflation-linked 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.| Cref Inflation-linked vs. Vanguard Total Stock | Cref Inflation-linked vs. Vanguard 500 Index | Cref Inflation-linked vs. Vanguard Total Stock | Cref Inflation-linked vs. Vanguard Total Stock |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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