Correlation Between Dws Equity and Aig Government
Can any of the company-specific risk be diversified away by investing in both Dws Equity and Aig Government 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 Dws Equity and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dws Equity Sector and Aig Government Money, you can compare the effects of market volatilities on Dws Equity and Aig Government 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 Dws Equity with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dws Equity and Aig Government.
Diversification Opportunities for Dws Equity and Aig Government
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dws and Aig is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dws Equity Sector and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money and Dws Equity 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 Dws Equity Sector are associated (or correlated) with Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Dws Equity i.e., Dws Equity and Aig Government go up and down completely randomly.
Pair Corralation between Dws Equity and Aig Government
Assuming the 90 days horizon Dws Equity Sector is expected to under-perform the Aig Government. In addition to that, Dws Equity is 3.79 times more volatile than Aig Government Money. It trades about -0.13 of its total potential returns per unit of risk. Aig Government Money is currently generating about -0.29 per unit of volatility. If you would invest 1,018 in Aig Government Money on October 11, 2024 and sell it today you would lose (13.00) from holding Aig Government Money or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dws Equity Sector vs. Aig Government Money
Performance |
| Timeline |
| Dws Equity Sector |
| Aig Government Money |
Dws Equity and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dws Equity and Aig Government
The main advantage of trading using opposite Dws Equity and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dws Equity position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.| Dws Equity vs. T Rowe Price | Dws Equity vs. Enhanced Fixed Income | Dws Equity vs. California Bond Fund | Dws Equity vs. T Rowe Price |
| Aig Government vs. Clearbridge Energy Mlp | Aig Government vs. Firsthand Alternative Energy | Aig Government vs. Salient Mlp Energy | Aig Government vs. Blackrock All Cap Energy |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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