Correlation Between Aig Government and Transamerica Inflation
Can any of the company-specific risk be diversified away by investing in both Aig Government and Transamerica Inflation 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 Transamerica Inflation 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 Transamerica Inflation Opportunities, you can compare the effects of market volatilities on Aig Government and Transamerica Inflation 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 Transamerica Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Transamerica Inflation.
Diversification Opportunities for Aig Government and Transamerica Inflation
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aig and Transamerica is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Transamerica Inflation Opportu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Inflation 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 Transamerica Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Inflation has no effect on the direction of Aig Government i.e., Aig Government and Transamerica Inflation go up and down completely randomly.
Pair Corralation between Aig Government and Transamerica Inflation
Assuming the 90 days horizon Aig Government is expected to generate 1.8 times less return on investment than Transamerica Inflation. But when comparing it to its historical volatility, Aig Government Money is 1.71 times less risky than Transamerica Inflation. It trades about 0.05 of its potential returns per unit of risk. Transamerica Inflation Opportunities is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 909.00 in Transamerica Inflation Opportunities on September 4, 2024 and sell it today you would earn a total of 71.00 from holding Transamerica Inflation Opportunities or generate 7.81% 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. Transamerica Inflation Opportu
Performance |
| Timeline |
| Aig Government Money |
| Transamerica Inflation |
Aig Government and Transamerica Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Transamerica Inflation
The main advantage of trading using opposite Aig Government and Transamerica Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Transamerica Inflation 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 Transamerica Inflation will offset losses from the drop in Transamerica Inflation'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 |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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