Correlation Between Aig Government and Americafirst Defensive
Can any of the company-specific risk be diversified away by investing in both Aig Government and Americafirst Defensive 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 Americafirst Defensive 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 Americafirst Defensive Growth, you can compare the effects of market volatilities on Aig Government and Americafirst Defensive 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 Americafirst Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Americafirst Defensive.
Diversification Opportunities for Aig Government and Americafirst Defensive
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aig and Americafirst is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Americafirst Defensive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Defensive 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 Americafirst Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Defensive has no effect on the direction of Aig Government i.e., Aig Government and Americafirst Defensive go up and down completely randomly.
Pair Corralation between Aig Government and Americafirst Defensive
Assuming the 90 days horizon Aig Government Money is expected to under-perform the Americafirst Defensive. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aig Government Money is 1.69 times less risky than Americafirst Defensive. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Americafirst Defensive Growth is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 855.00 in Americafirst Defensive Growth on August 30, 2024 and sell it today you would lose (1.00) from holding Americafirst Defensive Growth or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Aig Government Money vs. Americafirst Defensive Growth
Performance |
| Timeline |
| Aig Government Money |
| Americafirst Defensive |
Aig Government and Americafirst Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Americafirst Defensive
The main advantage of trading using opposite Aig Government and Americafirst Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Americafirst Defensive 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 Americafirst Defensive will offset losses from the drop in Americafirst Defensive'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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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