Correlation Between Aig Government and Fidelity Europe
Can any of the company-specific risk be diversified away by investing in both Aig Government and Fidelity Europe 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 Fidelity Europe 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 Fidelity Europe Fund, you can compare the effects of market volatilities on Aig Government and Fidelity Europe 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 Fidelity Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Fidelity Europe.
Diversification Opportunities for Aig Government and Fidelity Europe
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aig and Fidelity is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Fidelity Europe Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Europe 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 Fidelity Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Europe has no effect on the direction of Aig Government i.e., Aig Government and Fidelity Europe go up and down completely randomly.
Pair Corralation between Aig Government and Fidelity Europe
Assuming the 90 days horizon Aig Government Money is expected to generate 0.3 times more return on investment than Fidelity Europe. However, Aig Government Money is 3.3 times less risky than Fidelity Europe. It trades about 0.19 of its potential returns per unit of risk. Fidelity Europe Fund is currently generating about 0.01 per unit of risk. If you would invest 1,006 in Aig Government Money on September 5, 2024 and sell it today you would earn a total of 10.00 from holding Aig Government Money or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aig Government Money vs. Fidelity Europe Fund
Performance |
| Timeline |
| Aig Government Money |
| Fidelity Europe |
Aig Government and Fidelity Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Fidelity Europe
The main advantage of trading using opposite Aig Government and Fidelity Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Fidelity Europe 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 Fidelity Europe will offset losses from the drop in Fidelity Europe's long position.| Aig Government vs. Simt Multi Asset Accumulation | Aig Government vs. Saat Market Growth | Aig Government vs. Simt Real Return | Aig Government vs. Simt Small Cap |
| Fidelity Europe vs. Lord Abbett Government | Fidelity Europe vs. Aig Government Money | Fidelity Europe vs. Dws Government Money | Fidelity Europe vs. Us Government Securities |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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