Correlation Between Valic Company and International Growth
Can any of the company-specific risk be diversified away by investing in both Valic Company and International Growth 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 Valic Company and International Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valic Company I and International Growth Fund, you can compare the effects of market volatilities on Valic Company and International Growth 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 Valic Company with a short position of International Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and International Growth.
Diversification Opportunities for Valic Company and International Growth
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Valic and International is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and International Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Growth and Valic Company 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 Valic Company I are associated (or correlated) with International Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Growth has no effect on the direction of Valic Company i.e., Valic Company and International Growth go up and down completely randomly.
Pair Corralation between Valic Company and International Growth
Assuming the 90 days horizon Valic Company I is expected to generate 1.15 times more return on investment than International Growth. However, Valic Company is 1.15 times more volatile than International Growth Fund. It trades about 0.1 of its potential returns per unit of risk. International Growth Fund is currently generating about 0.04 per unit of risk. If you would invest 1,869 in Valic Company I on September 5, 2024 and sell it today you would earn a total of 280.00 from holding Valic Company I or generate 14.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. International Growth Fund
Performance |
| Timeline |
| Valic Company I |
| International Growth |
Valic Company and International Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and International Growth
The main advantage of trading using opposite Valic Company and International Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, International Growth 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 International Growth will offset losses from the drop in International Growth's long position.| Valic Company vs. Mid Cap Index | Valic Company vs. Mid Cap Strategic | Valic Company vs. Valic Company I | Valic Company vs. Stock Index Fund |
| International Growth vs. Mid Cap Index | International Growth vs. Mid Cap Strategic | International Growth vs. Valic Company I | International Growth vs. Valic Company I |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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