Correlation Between Mid Cap and Aig Government
Can any of the company-specific risk be diversified away by investing in both Mid Cap 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 Mid Cap and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap Growth and Aig Government Money, you can compare the effects of market volatilities on Mid Cap 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 Mid Cap with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Aig Government.
Diversification Opportunities for Mid Cap and Aig Government
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mid and Aig is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Growth 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 Mid Cap 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 Mid Cap Growth 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 Mid Cap i.e., Mid Cap and Aig Government go up and down completely randomly.
Pair Corralation between Mid Cap and Aig Government
Assuming the 90 days horizon Mid Cap Growth is expected to generate 5.16 times more return on investment than Aig Government. However, Mid Cap is 5.16 times more volatile than Aig Government Money. It trades about 0.39 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.08 per unit of risk. If you would invest 3,730 in Mid Cap Growth on August 27, 2024 and sell it today you would earn a total of 411.00 from holding Mid Cap Growth or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid Cap Growth vs. Aig Government Money
Performance |
| Timeline |
| Mid Cap Growth |
| Aig Government Money |
Mid Cap and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Cap and Aig Government
The main advantage of trading using opposite Mid Cap and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Cap 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.| Mid Cap vs. Touchstone Sustainability And | Mid Cap vs. Growth Opportunities Fund | Mid Cap vs. Total Return Fund | Mid Cap vs. William Blair International |
| Aig Government vs. T Rowe Price | Aig Government vs. American Century California | Aig Government vs. Cref Money Market | Aig Government vs. Legg Mason Partners |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |