Correlation Between Aig Government and Long Term
Can any of the company-specific risk be diversified away by investing in both Aig Government and Long Term 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 Aig Government and Long Term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aig Government Money and The Long Term, you can compare the effects of market volatilities on Aig Government and Long Term 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 Aig Government with a short position of Long Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Long Term.
Diversification Opportunities for Aig Government and Long Term
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aig and Long is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and The Long Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Term and Aig 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 Aig Government Money are associated (or correlated) with Long Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Term has no effect on the direction of Aig Government i.e., Aig Government and Long Term go up and down completely randomly.
Pair Corralation between Aig Government and Long Term
Assuming the 90 days horizon Aig Government is expected to generate 7.31 times less return on investment than Long Term. But when comparing it to its historical volatility, Aig Government Money is 4.32 times less risky than Long Term. It trades about 0.19 of its potential returns per unit of risk. The Long Term is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 3,164 in The Long Term on September 2, 2024 and sell it today you would earn a total of 235.00 from holding The Long Term or generate 7.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. The Long Term
Performance |
| Timeline |
| Aig Government Money |
| Long Term |
Aig Government and Long Term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Long Term
The main advantage of trading using opposite Aig Government and Long Term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Long Term 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 Long Term will offset losses from the drop in Long Term's long position.| Aig Government vs. Artisan Thematic Fund | Aig Government vs. Growth Opportunities Fund | Aig Government vs. Volumetric Fund Volumetric | Aig Government vs. Small Cap Stock |
| Long Term vs. John Hancock Money | Long Term vs. Aig Government Money | Long Term vs. Dreyfus Institutional Reserves | Long Term vs. T Rowe Price |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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