Correlation Between Aig Government and Stadion Tactical
Can any of the company-specific risk be diversified away by investing in both Aig Government and Stadion Tactical 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 Stadion Tactical 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 Stadion Tactical Growth, you can compare the effects of market volatilities on Aig Government and Stadion Tactical 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 Stadion Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Stadion Tactical.
Diversification Opportunities for Aig Government and Stadion Tactical
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aig and Stadion is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Stadion Tactical Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stadion Tactical Growth 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 Stadion Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stadion Tactical Growth has no effect on the direction of Aig Government i.e., Aig Government and Stadion Tactical go up and down completely randomly.
Pair Corralation between Aig Government and Stadion Tactical
Assuming the 90 days horizon Aig Government is expected to generate 5.29 times less return on investment than Stadion Tactical. But when comparing it to its historical volatility, Aig Government Money is 3.85 times less risky than Stadion Tactical. It trades about 0.05 of its potential returns per unit of risk. Stadion Tactical Growth is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,309 in Stadion Tactical Growth on September 2, 2024 and sell it today you would earn a total of 330.00 from holding Stadion Tactical Growth or generate 25.21% 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. Stadion Tactical Growth
Performance |
| Timeline |
| Aig Government Money |
| Stadion Tactical Growth |
Aig Government and Stadion Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Stadion Tactical
The main advantage of trading using opposite Aig Government and Stadion Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Stadion Tactical 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 Stadion Tactical will offset losses from the drop in Stadion Tactical'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 |
| Stadion Tactical vs. Virtus Seix Government | Stadion Tactical vs. Us Government Securities | Stadion Tactical vs. Aig Government Money | Stadion Tactical vs. Goldman Sachs Government |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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