Correlation Between Active Bond and Aig Government
Can any of the company-specific risk be diversified away by investing in both Active Bond 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 Active Bond and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Active Bond Fund and Aig Government Money, you can compare the effects of market volatilities on Active Bond 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 Active Bond with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Active Bond and Aig Government.
Diversification Opportunities for Active Bond and Aig Government
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Active and Aig is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Active Bond Fund 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 Active Bond 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 Active Bond Fund 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 Active Bond i.e., Active Bond and Aig Government go up and down completely randomly.
Pair Corralation between Active Bond and Aig Government
Assuming the 90 days horizon Active Bond is expected to generate 1.26 times less return on investment than Aig Government. In addition to that, Active Bond is 1.22 times more volatile than Aig Government Money. It trades about 0.12 of its total potential returns per unit of risk. Aig Government Money is currently generating about 0.18 per unit of volatility. If you would invest 1,006 in Aig Government Money on September 5, 2024 and sell it today you would earn a total of 10.00 from holding Aig Government Money or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Active Bond Fund vs. Aig Government Money
Performance |
| Timeline |
| Active Bond Fund |
| Aig Government Money |
Active Bond and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Active Bond and Aig Government
The main advantage of trading using opposite Active Bond and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Active Bond 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.| Active Bond vs. Aig Government Money | Active Bond vs. Us Government Plus | Active Bond vs. Lord Abbett Government | Active Bond vs. Us Government Securities |
| Aig Government vs. Simt Multi Asset Accumulation | Aig Government vs. Saat Market Growth | Aig Government vs. Simt Real Return | Aig Government vs. Simt Small Cap |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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