Correlation Between Aig Government and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both Aig Government and Wells Fargo 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 Wells Fargo 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 Wells Fargo Funds, you can compare the effects of market volatilities on Aig Government and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Wells Fargo.
Diversification Opportunities for Aig Government and Wells Fargo
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aig and Wells is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Wells Fargo Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Funds 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Funds has no effect on the direction of Aig Government i.e., Aig Government and Wells Fargo go up and down completely randomly.
Pair Corralation between Aig Government and Wells Fargo
If you would invest 1,006 in Aig Government Money on September 3, 2024 and sell it today you would earn a total of 8.00 from holding Aig Government Money or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aig Government Money vs. Wells Fargo Funds
Performance |
| Timeline |
| Aig Government Money |
| Wells Fargo Funds |
Aig Government and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Wells Fargo
The main advantage of trading using opposite Aig Government and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo's long position.| Aig Government vs. Nuveen Massachusetts Municipal | Aig Government vs. Nuveen Massachusetts Municipal | Aig Government vs. Mfs Massachusetts Municipal |
| Wells Fargo vs. Vanguard Total Stock | Wells Fargo vs. Vanguard 500 Index | Wells Fargo vs. Vanguard Total Stock | Wells Fargo vs. Vanguard Total Stock |
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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