Correlation Between Aig Government and Guidemark(r) Core
Can any of the company-specific risk be diversified away by investing in both Aig Government and Guidemark(r) Core 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 Guidemark(r) Core 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 Guidemark E Fixed, you can compare the effects of market volatilities on Aig Government and Guidemark(r) Core 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 Guidemark(r) Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Guidemark(r) Core.
Diversification Opportunities for Aig Government and Guidemark(r) Core
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aig and Guidemark(r) is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Guidemark E Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark E Fixed 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 Guidemark(r) Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark E Fixed has no effect on the direction of Aig Government i.e., Aig Government and Guidemark(r) Core go up and down completely randomly.
Pair Corralation between Aig Government and Guidemark(r) Core
Assuming the 90 days horizon Aig Government is expected to generate 1.67 times less return on investment than Guidemark(r) Core. But when comparing it to its historical volatility, Aig Government Money is 1.58 times less risky than Guidemark(r) Core. It trades about 0.09 of its potential returns per unit of risk. Guidemark E Fixed is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 809.00 in Guidemark E Fixed on November 4, 2024 and sell it today you would earn a total of 4.00 from holding Guidemark E Fixed or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Guidemark E Fixed
Performance |
| Timeline |
| Aig Government Money |
| Guidemark E Fixed |
Aig Government and Guidemark(r) Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Guidemark(r) Core
The main advantage of trading using opposite Aig Government and Guidemark(r) Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Guidemark(r) Core 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 Guidemark(r) Core will offset losses from the drop in Guidemark(r) Core's long position.| Aig Government vs. Federated Emerging Market | Aig Government vs. Angel Oak Multi Strategy | Aig Government vs. Siit Emerging Markets | Aig Government vs. Ashmore Emerging Markets |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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