Correlation Between Aig Government and Investment Quality
Can any of the company-specific risk be diversified away by investing in both Aig Government and Investment Quality 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 Investment Quality 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 Investment Quality Bond, you can compare the effects of market volatilities on Aig Government and Investment Quality 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 Investment Quality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Investment Quality.
Diversification Opportunities for Aig Government and Investment Quality
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aig and Investment is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Investment Quality Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Quality Bond 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 Investment Quality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Quality Bond has no effect on the direction of Aig Government i.e., Aig Government and Investment Quality go up and down completely randomly.
Pair Corralation between Aig Government and Investment Quality
Assuming the 90 days horizon Aig Government Money is expected to generate 0.76 times more return on investment than Investment Quality. However, Aig Government Money is 1.32 times less risky than Investment Quality. It trades about 0.03 of its potential returns per unit of risk. Investment Quality Bond is currently generating about 0.02 per unit of risk. If you would invest 987.00 in Aig Government Money on August 29, 2024 and sell it today you would earn a total of 21.00 from holding Aig Government Money or generate 2.13% 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. Investment Quality Bond
Performance |
| Timeline |
| Aig Government Money |
| Investment Quality Bond |
Aig Government and Investment Quality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Investment Quality
The main advantage of trading using opposite Aig Government and Investment Quality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Investment Quality 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 Investment Quality will offset losses from the drop in Investment Quality's long position.| Aig Government vs. Simt Multi Asset Accumulation | Aig Government vs. Simt Small Cap | Aig Government vs. Tax Free Conservative Income | Aig Government vs. Tax Free Conservative |
| Investment Quality vs. Icon Financial Fund | Investment Quality vs. Financials Ultrasector Profund | Investment Quality vs. Vanguard Financials Index | Investment Quality vs. 1919 Financial Services |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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