Correlation Between Aig Government and Gmo Us
Can any of the company-specific risk be diversified away by investing in both Aig Government and Gmo Us 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 Gmo Us 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 Gmo Equity Allocation, you can compare the effects of market volatilities on Aig Government and Gmo Us 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 Gmo Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Gmo Us.
Diversification Opportunities for Aig Government and Gmo Us
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aig and Gmo is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Gmo Equity Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Equity Allocation 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 Gmo Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Equity Allocation has no effect on the direction of Aig Government i.e., Aig Government and Gmo Us go up and down completely randomly.
Pair Corralation between Aig Government and Gmo Us
Assuming the 90 days horizon Aig Government is expected to generate 7.31 times less return on investment than Gmo Us. But when comparing it to its historical volatility, Aig Government Money is 4.88 times less risky than Gmo Us. It trades about 0.03 of its potential returns per unit of risk. Gmo Equity Allocation is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,207 in Gmo Equity Allocation on September 3, 2024 and sell it today you would earn a total of 284.00 from holding Gmo Equity Allocation or generate 23.53% 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. Gmo Equity Allocation
Performance |
| Timeline |
| Aig Government Money |
| Gmo Equity Allocation |
Aig Government and Gmo Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Gmo Us
The main advantage of trading using opposite Aig Government and Gmo Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Gmo Us 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 Gmo Us will offset losses from the drop in Gmo Us' long position.| Aig Government vs. Nuveen Massachusetts Municipal | Aig Government vs. Nuveen Massachusetts Municipal | Aig Government vs. Mfs Massachusetts Municipal |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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