Correlation Between Aig Government and Arrow Managed
Can any of the company-specific risk be diversified away by investing in both Aig Government and Arrow Managed 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 Arrow Managed 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 Arrow Managed Futures, you can compare the effects of market volatilities on Aig Government and Arrow Managed 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 Arrow Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Arrow Managed.
Diversification Opportunities for Aig Government and Arrow Managed
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aig and Arrow is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Arrow Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Managed Futures 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 Arrow Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Managed Futures has no effect on the direction of Aig Government i.e., Aig Government and Arrow Managed go up and down completely randomly.
Pair Corralation between Aig Government and Arrow Managed
Assuming the 90 days horizon Aig Government is expected to generate 4.81 times less return on investment than Arrow Managed. But when comparing it to its historical volatility, Aig Government Money is 10.64 times less risky than Arrow Managed. It trades about 0.56 of its potential returns per unit of risk. Arrow Managed Futures is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 488.00 in Arrow Managed Futures on September 13, 2024 and sell it today you would earn a total of 28.00 from holding Arrow Managed Futures or generate 5.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Arrow Managed Futures
Performance |
| Timeline |
| Aig Government Money |
| Arrow Managed Futures |
Aig Government and Arrow Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Arrow Managed
The main advantage of trading using opposite Aig Government and Arrow Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Arrow Managed 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 Arrow Managed will offset losses from the drop in Arrow Managed'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 |
| Arrow Managed vs. Nasdaq 100 2x Strategy | Arrow Managed vs. Siit Emerging Markets | Arrow Managed vs. Origin Emerging Markets | Arrow Managed vs. Franklin Emerging Market |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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