Correlation Between Aig Government and Invesco Small
Can any of the company-specific risk be diversified away by investing in both Aig Government and Invesco Small 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 Invesco Small 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 Invesco Small Cap, you can compare the effects of market volatilities on Aig Government and Invesco Small 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 Invesco Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Invesco Small.
Diversification Opportunities for Aig Government and Invesco Small
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aig and Invesco is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Invesco Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Small Cap 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 Invesco Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Small Cap has no effect on the direction of Aig Government i.e., Aig Government and Invesco Small go up and down completely randomly.
Pair Corralation between Aig Government and Invesco Small
Assuming the 90 days horizon Aig Government is expected to generate 7.17 times less return on investment than Invesco Small. But when comparing it to its historical volatility, Aig Government Money is 7.07 times less risky than Invesco Small. It trades about 0.12 of its potential returns per unit of risk. Invesco Small Cap is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,237 in Invesco Small Cap on September 3, 2024 and sell it today you would earn a total of 261.00 from holding Invesco Small Cap or generate 21.1% 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. Invesco Small Cap
Performance |
| Timeline |
| Aig Government Money |
| Invesco Small Cap |
Aig Government and Invesco Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Invesco Small
The main advantage of trading using opposite Aig Government and Invesco Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Invesco Small 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 Invesco Small will offset losses from the drop in Invesco Small's long position.| Aig Government vs. Vanguard Massachusetts Tax Exempt | Aig Government vs. Nuveen Massachusetts Municipal | Aig Government vs. Nuveen Massachusetts Municipal | Aig Government vs. Mfs Massachusetts Municipal |
| Invesco Small vs. John Hancock Money | Invesco Small vs. Prudential Government Money | Invesco Small vs. Aig Government Money | Invesco Small vs. First American Funds |
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 CEOs Directory module to screen CEOs from public companies around the world.
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