Correlation Between Aig Government and Intermediate Term
Can any of the company-specific risk be diversified away by investing in both Aig Government and Intermediate 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 Intermediate 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 Intermediate Term Tax Free Bond, you can compare the effects of market volatilities on Aig Government and Intermediate 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 Intermediate Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Intermediate Term.
Diversification Opportunities for Aig Government and Intermediate Term
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aig and Intermediate is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Intermediate Term Tax Free Bon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Term Tax 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 Intermediate Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Term Tax has no effect on the direction of Aig Government i.e., Aig Government and Intermediate Term go up and down completely randomly.
Pair Corralation between Aig Government and Intermediate Term
Assuming the 90 days horizon Aig Government Money is expected to generate 1.03 times more return on investment than Intermediate Term. However, Aig Government is 1.03 times more volatile than Intermediate Term Tax Free Bond. It trades about 0.12 of its potential returns per unit of risk. Intermediate Term Tax Free Bond is currently generating about 0.1 per unit of risk. If you would invest 992.00 in Aig Government Money on September 13, 2024 and sell it today you would earn a total of 26.00 from holding Aig Government Money or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Intermediate Term Tax Free Bon
Performance |
| Timeline |
| Aig Government Money |
| Intermediate Term Tax |
Aig Government and Intermediate Term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Intermediate Term
The main advantage of trading using opposite Aig Government and Intermediate Term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Intermediate 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 Intermediate Term will offset losses from the drop in Intermediate Term'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 |
| Intermediate Term vs. Us High Relative | Intermediate Term vs. Morningstar Aggressive Growth | Intermediate Term vs. Fa 529 Aggressive | Intermediate Term vs. Intal High Relative |
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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