Correlation Between Aig Government and Cullen International
Can any of the company-specific risk be diversified away by investing in both Aig Government and Cullen International 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 Cullen International 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 Cullen International High, you can compare the effects of market volatilities on Aig Government and Cullen International 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 Cullen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Cullen International.
Diversification Opportunities for Aig Government and Cullen International
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aig and Cullen is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Cullen International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen International High 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 Cullen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen International High has no effect on the direction of Aig Government i.e., Aig Government and Cullen International go up and down completely randomly.
Pair Corralation between Aig Government and Cullen International
Assuming the 90 days horizon Aig Government Money is expected to generate 0.36 times more return on investment than Cullen International. However, Aig Government Money is 2.77 times less risky than Cullen International. It trades about 0.17 of its potential returns per unit of risk. Cullen International High is currently generating about -0.11 per unit of risk. If you would invest 1,002 in Aig Government Money on August 30, 2024 and sell it today you would earn a total of 9.00 from holding Aig Government Money or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Cullen International High
Performance |
| Timeline |
| Aig Government Money |
| Cullen International High |
Aig Government and Cullen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Cullen International
The main advantage of trading using opposite Aig Government and Cullen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Cullen International 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 Cullen International will offset losses from the drop in Cullen International's long position.| Aig Government vs. Simt Multi Asset Accumulation | Aig Government vs. Simt Real Return | Aig Government vs. Simt Small Cap | Aig Government vs. Siit Screened World |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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