Correlation Between Aig Government and Franklin Adjustable
Can any of the company-specific risk be diversified away by investing in both Aig Government and Franklin Adjustable 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 Franklin Adjustable 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 Franklin Adjustable Government, you can compare the effects of market volatilities on Aig Government and Franklin Adjustable 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 Franklin Adjustable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Franklin Adjustable.
Diversification Opportunities for Aig Government and Franklin Adjustable
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aig and Franklin is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Franklin Adjustable Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Adjustable 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 Franklin Adjustable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Adjustable has no effect on the direction of Aig Government i.e., Aig Government and Franklin Adjustable go up and down completely randomly.
Pair Corralation between Aig Government and Franklin Adjustable
Assuming the 90 days horizon Aig Government Money is expected to generate 2.33 times more return on investment than Franklin Adjustable. However, Aig Government is 2.33 times more volatile than Franklin Adjustable Government. It trades about 0.24 of its potential returns per unit of risk. Franklin Adjustable Government is currently generating about 0.08 per unit of risk. If you would invest 1,003 in Aig Government Money on November 9, 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Franklin Adjustable Government
Performance |
| Timeline |
| Aig Government Money |
| Franklin Adjustable |
Aig Government and Franklin Adjustable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Franklin Adjustable
The main advantage of trading using opposite Aig Government and Franklin Adjustable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Franklin Adjustable 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 Franklin Adjustable will offset losses from the drop in Franklin Adjustable's long position.| Aig Government vs. Elfun Government Money | Aig Government vs. Jpmorgan Government Bond | Aig Government vs. Dws Government Money | Aig Government vs. John Hancock Government |
| Franklin Adjustable vs. Ab Global Bond | Franklin Adjustable vs. Goldman Sachs Short | Franklin Adjustable vs. Blrc Sgy Mnp | Franklin Adjustable vs. Siit High Yield |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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