Correlation Between Aig Government and Prudential Financial
Can any of the company-specific risk be diversified away by investing in both Aig Government and Prudential Financial 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 Prudential Financial 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 Prudential Financial Services, you can compare the effects of market volatilities on Aig Government and Prudential Financial 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 Prudential Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Prudential Financial.
Diversification Opportunities for Aig Government and Prudential Financial
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aig and Prudential is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Prudential Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Financial 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 Prudential Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Financial has no effect on the direction of Aig Government i.e., Aig Government and Prudential Financial go up and down completely randomly.
Pair Corralation between Aig Government and Prudential Financial
Assuming the 90 days horizon Aig Government Money is expected to generate 0.14 times more return on investment than Prudential Financial. However, Aig Government Money is 6.9 times less risky than Prudential Financial. It trades about 0.49 of its potential returns per unit of risk. Prudential Financial Services is currently generating about -0.01 per unit of risk. If you would invest 1,006 in Aig Government Money on September 14, 2024 and sell it today you would earn a total of 11.00 from holding Aig Government Money or generate 1.09% 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. Prudential Financial Services
Performance |
| Timeline |
| Aig Government Money |
| Prudential Financial |
Aig Government and Prudential Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Prudential Financial
The main advantage of trading using opposite Aig Government and Prudential Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Prudential Financial 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 Prudential Financial will offset losses from the drop in Prudential Financial'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 |
| Prudential Financial vs. Aig Government Money | Prudential Financial vs. Franklin Adjustable Government | Prudential Financial vs. Elfun Government Money | Prudential Financial vs. Schwab Government Money |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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