Correlation Between Aig Government and First American
Can any of the company-specific risk be diversified away by investing in both Aig Government and First American 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 First American 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 First American Funds, you can compare the effects of market volatilities on Aig Government and First American 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 First American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and First American.
Diversification Opportunities for Aig Government and First American
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aig and First is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and First American Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First American Funds 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 First American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First American Funds has no effect on the direction of Aig Government i.e., Aig Government and First American go up and down completely randomly.
Pair Corralation between Aig Government and First American
If you would invest 1,006 in Aig Government Money on September 4, 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. First American Funds
Performance |
| Timeline |
| Aig Government Money |
| First American Funds |
Aig Government and First American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and First American
The main advantage of trading using opposite Aig Government and First American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, First American 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 First American will offset losses from the drop in First American'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 |
| First American vs. Vanguard Total Stock | First American vs. Vanguard 500 Index | First American vs. Vanguard Total Stock | First American vs. Vanguard Total Stock |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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