Correlation Between Usaa Virginia and American Independence
Can any of the company-specific risk be diversified away by investing in both Usaa Virginia and American Independence 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 Usaa Virginia and American Independence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Usaa Virginia Bond and American Independence Kansas, you can compare the effects of market volatilities on Usaa Virginia and American Independence 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 Usaa Virginia with a short position of American Independence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usaa Virginia and American Independence.
Diversification Opportunities for Usaa Virginia and American Independence
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Usaa and American is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Usaa Virginia Bond and American Independence Kansas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Independence and Usaa Virginia 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 Usaa Virginia Bond are associated (or correlated) with American Independence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Independence has no effect on the direction of Usaa Virginia i.e., Usaa Virginia and American Independence go up and down completely randomly.
Pair Corralation between Usaa Virginia and American Independence
Assuming the 90 days horizon Usaa Virginia Bond is expected to generate 1.94 times more return on investment than American Independence. However, Usaa Virginia is 1.94 times more volatile than American Independence Kansas. It trades about 0.18 of its potential returns per unit of risk. American Independence Kansas is currently generating about 0.31 per unit of risk. If you would invest 1,042 in Usaa Virginia Bond on December 1, 2024 and sell it today you would earn a total of 11.00 from holding Usaa Virginia Bond or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Usaa Virginia Bond vs. American Independence Kansas
Performance |
| Timeline |
| Usaa Virginia Bond |
| American Independence |
Usaa Virginia and American Independence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Usaa Virginia and American Independence
The main advantage of trading using opposite Usaa Virginia and American Independence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usaa Virginia position performs unexpectedly, American Independence 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 American Independence will offset losses from the drop in American Independence's long position.| Usaa Virginia vs. Wilmington Diversified Income | Usaa Virginia vs. Jhancock Diversified Macro | Usaa Virginia vs. Diversified Real Asset | Usaa Virginia vs. Principal Lifetime Hybrid |
| American Independence vs. Goldman Sachs Emerging | American Independence vs. Mondrian Emerging Markets | American Independence vs. Investec Emerging Markets | American Independence vs. Dodge Cox Emerging |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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