Correlation Between Valic Company and Stock Index
Can any of the company-specific risk be diversified away by investing in both Valic Company and Stock Index 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 Stock Index 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 Stock Index Fund, you can compare the effects of market volatilities on Valic Company and Stock Index 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 Stock Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Stock Index.
Diversification Opportunities for Valic Company and Stock Index
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Valic and Stock is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Stock Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Index Fund 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 Stock Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Index Fund has no effect on the direction of Valic Company i.e., Valic Company and Stock Index go up and down completely randomly.
Pair Corralation between Valic Company and Stock Index
Assuming the 90 days horizon Valic Company I is expected to generate 1.37 times more return on investment than Stock Index. However, Valic Company is 1.37 times more volatile than Stock Index Fund. It trades about 0.14 of its potential returns per unit of risk. Stock Index Fund is currently generating about 0.12 per unit of risk. If you would invest 1,875 in Valic Company I on November 2, 2024 and sell it today you would earn a total of 310.00 from holding Valic Company I or generate 16.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.04% |
| Values | Daily Returns |
Valic Company I vs. Stock Index Fund
Performance |
| Timeline |
| Valic Company I |
| Stock Index Fund |
Valic Company and Stock Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Stock Index
The main advantage of trading using opposite Valic Company and Stock Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Stock Index 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 Stock Index will offset losses from the drop in Stock Index's long position.| Valic Company vs. Pace High Yield | Valic Company vs. T Rowe Price | Valic Company vs. Millerhoward High Income | Valic Company vs. Siit High Yield |
| Stock Index vs. Mid Cap Index | Stock Index vs. Valic Company I | Stock Index vs. Mid Cap Strategic | Stock Index 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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