Correlation Between Aig Government and Short Term
Can any of the company-specific risk be diversified away by investing in both Aig Government and Short Term 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 Short Term 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 Short Term Government Fund, you can compare the effects of market volatilities on Aig Government and Short Term 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 Short Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Short Term.
Diversification Opportunities for Aig Government and Short Term
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aig and Short is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Short Term Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Government 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 Short Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Government has no effect on the direction of Aig Government i.e., Aig Government and Short Term go up and down completely randomly.
Pair Corralation between Aig Government and Short Term
Assuming the 90 days horizon Aig Government is expected to generate 1.68 times less return on investment than Short Term. In addition to that, Aig Government is 1.38 times more volatile than Short Term Government Fund. It trades about 0.07 of its total potential returns per unit of risk. Short Term Government Fund is currently generating about 0.17 per unit of volatility. If you would invest 890.00 in Short Term Government Fund on October 21, 2024 and sell it today you would earn a total of 3.00 from holding Short Term Government Fund or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Short Term Government Fund
Performance |
| Timeline |
| Aig Government Money |
| Short Term Government |
Aig Government and Short Term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Short Term
The main advantage of trading using opposite Aig Government and Short Term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Short Term 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 Short Term will offset losses from the drop in Short Term's long position.| Aig Government vs. Invesco Gold Special | Aig Government vs. Great West Goldman Sachs | Aig Government vs. Franklin Gold Precious | Aig Government vs. World Precious Minerals |
| Short Term vs. Needham Aggressive Growth | Short Term vs. L Abbett Growth | Short Term vs. Mid Cap Growth | Short Term vs. Stringer Growth Fund |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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