Correlation Between Aig Government and Metropolitan West
Can any of the company-specific risk be diversified away by investing in both Aig Government and Metropolitan West 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 Metropolitan West 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 Metropolitan West Unconstrained, you can compare the effects of market volatilities on Aig Government and Metropolitan West 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 Metropolitan West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Metropolitan West.
Diversification Opportunities for Aig Government and Metropolitan West
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aig and Metropolitan is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Metropolitan West Unconstraine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan West 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 Metropolitan West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan West has no effect on the direction of Aig Government i.e., Aig Government and Metropolitan West go up and down completely randomly.
Pair Corralation between Aig Government and Metropolitan West
Assuming the 90 days horizon Aig Government Money is expected to generate 0.49 times more return on investment than Metropolitan West. However, Aig Government Money is 2.04 times less risky than Metropolitan West. It trades about 0.56 of its potential returns per unit of risk. Metropolitan West Unconstrained is currently generating about 0.2 per unit of risk. If you would invest 1,007 in Aig Government Money on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Aig Government Money or generate 1.19% 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. Metropolitan West Unconstraine
Performance |
| Timeline |
| Aig Government Money |
| Metropolitan West |
Aig Government and Metropolitan West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Metropolitan West
The main advantage of trading using opposite Aig Government and Metropolitan West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Metropolitan West 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 Metropolitan West will offset losses from the drop in Metropolitan West's long position.| Aig Government vs. SCOR PK | Aig Government vs. Morningstar Unconstrained Allocation | Aig Government vs. Via Renewables | Aig Government vs. Bondbloxx ETF Trust |
| Metropolitan West vs. Ms Global Fixed | Metropolitan West vs. Ab Fixed Income Shares | Metropolitan West vs. Dodge International Stock | Metropolitan West vs. Balanced Fund Retail |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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