Correlation Between Aig Government and Health Care
Can any of the company-specific risk be diversified away by investing in both Aig Government and Health Care 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 Health Care 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 Health Care Ultrasector, you can compare the effects of market volatilities on Aig Government and Health Care 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 Health Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Health Care.
Diversification Opportunities for Aig Government and Health Care
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aig and Health is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Health Care Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Care Ultrasector 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 Health Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Care Ultrasector has no effect on the direction of Aig Government i.e., Aig Government and Health Care go up and down completely randomly.
Pair Corralation between Aig Government and Health Care
Assuming the 90 days horizon Aig Government is expected to generate 4.4 times less return on investment than Health Care. But when comparing it to its historical volatility, Aig Government Money is 5.41 times less risky than Health Care. It trades about 0.05 of its potential returns per unit of risk. Health Care Ultrasector is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,417 in Health Care Ultrasector on August 31, 2024 and sell it today you would earn a total of 1,509 from holding Health Care Ultrasector or generate 16.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Aig Government Money vs. Health Care Ultrasector
Performance |
| Timeline |
| Aig Government Money |
| Health Care Ultrasector |
Aig Government and Health Care Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Health Care
The main advantage of trading using opposite Aig Government and Health Care positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Health Care 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 Health Care will offset losses from the drop in Health Care's long position.| Aig Government vs. Western Asset Inflation | Aig Government vs. Aqr Managed Futures | Aig Government vs. Nationwide Inflation Protected Securities | Aig Government vs. Cref Inflation Linked Bond |
| Health Care vs. Pro Blend Moderate Term | Health Care vs. Moderately Aggressive Balanced | Health Care vs. Saat Moderate Strategy | Health Care vs. Jp Morgan Smartretirement |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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