Correlation Between Aig Government and Vanguard Value
Can any of the company-specific risk be diversified away by investing in both Aig Government and Vanguard Value 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 Vanguard Value 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 Vanguard Value Index, you can compare the effects of market volatilities on Aig Government and Vanguard Value 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 Vanguard Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Vanguard Value.
Diversification Opportunities for Aig Government and Vanguard Value
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aig and Vanguard is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Vanguard Value Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Value Index 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 Vanguard Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Value Index has no effect on the direction of Aig Government i.e., Aig Government and Vanguard Value go up and down completely randomly.
Pair Corralation between Aig Government and Vanguard Value
Assuming the 90 days horizon Aig Government Money is expected to generate 0.2 times more return on investment than Vanguard Value. However, Aig Government Money is 4.96 times less risky than Vanguard Value. It trades about 0.49 of its potential returns per unit of risk. Vanguard Value Index is currently generating about -0.16 per unit of risk. If you would invest 1,007 in Aig Government Money on September 12, 2024 and sell it today you would earn a total of 11.00 from holding Aig Government Money or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Vanguard Value Index
Performance |
| Timeline |
| Aig Government Money |
| Vanguard Value Index |
Aig Government and Vanguard Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Vanguard Value
The main advantage of trading using opposite Aig Government and Vanguard Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Vanguard Value 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 Vanguard Value will offset losses from the drop in Vanguard Value's long position.| Aig Government vs. SCOR PK | Aig Government vs. Morningstar Unconstrained Allocation | Aig Government vs. Via Renewables | Aig Government vs. Bondbloxx ETF Trust |
| Vanguard Value vs. Aig Government Money | Vanguard Value vs. Schwab Treasury Money | Vanguard Value vs. Hewitt Money Market | Vanguard Value vs. Edward Jones Money |
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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