Correlation Between Aig Government and Alternative Credit
Can any of the company-specific risk be diversified away by investing in both Aig Government and Alternative Credit 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 Alternative Credit 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 Alternative Credit Income, you can compare the effects of market volatilities on Aig Government and Alternative Credit 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 Alternative Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Alternative Credit.
Diversification Opportunities for Aig Government and Alternative Credit
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aig and Alternative is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Alternative Credit Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternative Credit Income 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 Alternative Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternative Credit Income has no effect on the direction of Aig Government i.e., Aig Government and Alternative Credit go up and down completely randomly.
Pair Corralation between Aig Government and Alternative Credit
Assuming the 90 days horizon Aig Government Money is expected to generate 0.75 times more return on investment than Alternative Credit. However, Aig Government Money is 1.34 times less risky than Alternative Credit. It trades about 0.14 of its potential returns per unit of risk. Alternative Credit Income is currently generating about 0.06 per unit of risk. If you would invest 980.00 in Aig Government Money on September 1, 2024 and sell it today you would earn a total of 32.00 from holding Aig Government Money or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Aig Government Money vs. Alternative Credit Income
Performance |
| Timeline |
| Aig Government Money |
| Alternative Credit Income |
Aig Government and Alternative Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Alternative Credit
The main advantage of trading using opposite Aig Government and Alternative Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Alternative Credit 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 Alternative Credit will offset losses from the drop in Alternative Credit's long position.| Aig Government vs. Prudential Health Sciences | Aig Government vs. Health Biotchnology Portfolio | Aig Government vs. Baillie Gifford Health | Aig Government vs. Baron Health Care |
| Alternative Credit vs. Baird Smallmid Cap | Alternative Credit vs. Fisher Small Cap | Alternative Credit vs. Small Pany Growth | Alternative Credit vs. Small Midcap Dividend Income |
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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