Correlation Between Sierra Tactical and Aig Government
Can any of the company-specific risk be diversified away by investing in both Sierra Tactical 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 Sierra Tactical and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sierra Tactical Municipal and Aig Government Money, you can compare the effects of market volatilities on Sierra Tactical 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 Sierra Tactical with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sierra Tactical and Aig Government.
Diversification Opportunities for Sierra Tactical and Aig Government
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sierra and Aig is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sierra Tactical Municipal 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 Sierra Tactical 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 Sierra Tactical Municipal 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 Sierra Tactical i.e., Sierra Tactical and Aig Government go up and down completely randomly.
Pair Corralation between Sierra Tactical and Aig Government
Assuming the 90 days horizon Sierra Tactical Municipal is expected to generate 1.16 times more return on investment than Aig Government. However, Sierra Tactical is 1.16 times more volatile than Aig Government Money. It trades about 0.05 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.04 per unit of risk. If you would invest 2,438 in Sierra Tactical Municipal on August 30, 2024 and sell it today you would earn a total of 143.00 from holding Sierra Tactical Municipal or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sierra Tactical Municipal vs. Aig Government Money
Performance |
| Timeline |
| Sierra Tactical Municipal |
| Aig Government Money |
Sierra Tactical and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sierra Tactical and Aig Government
The main advantage of trading using opposite Sierra Tactical and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sierra Tactical 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.| Sierra Tactical vs. Baillie Gifford Health | Sierra Tactical vs. Blackrock Health Sciences | Sierra Tactical vs. Lord Abbett Health | Sierra Tactical vs. Health Care Fund |
| Aig Government vs. HUMANA INC | Aig Government vs. Aquagold International | Aig Government vs. Barloworld Ltd ADR | Aig Government vs. Morningstar Unconstrained Allocation |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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