Correlation Between Aig Government and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Aig Government and Emerging Markets 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 Emerging Markets 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 Emerging Markets Fund, you can compare the effects of market volatilities on Aig Government and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Emerging Markets.
Diversification Opportunities for Aig Government and Emerging Markets
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aig and Emerging is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Emerging Markets Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets has no effect on the direction of Aig Government i.e., Aig Government and Emerging Markets go up and down completely randomly.
Pair Corralation between Aig Government and Emerging Markets
Assuming the 90 days horizon Aig Government Money is expected to generate 0.33 times more return on investment than Emerging Markets. However, Aig Government Money is 3.0 times less risky than Emerging Markets. It trades about 0.16 of its potential returns per unit of risk. Emerging Markets Fund is currently generating about -0.28 per unit of risk. If you would invest 1,006 in Aig Government Money on September 3, 2024 and sell it today you would earn a total of 8.00 from holding Aig Government Money or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Emerging Markets Fund
Performance |
| Timeline |
| Aig Government Money |
| Emerging Markets |
Aig Government and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Emerging Markets
The main advantage of trading using opposite Aig Government and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Aig Government vs. Nuveen Massachusetts Municipal | Aig Government vs. Nuveen Massachusetts Municipal | Aig Government vs. Mfs Massachusetts Municipal |
| Emerging Markets vs. Hsbc Treasury Money | Emerging Markets vs. First American Funds | Emerging Markets vs. Aig Government Money | Emerging Markets vs. Janus Investment |
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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