Correlation Between Blue Chip and Valic Company
Can any of the company-specific risk be diversified away by investing in both Blue Chip and Valic Company 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 Blue Chip and Valic Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Chip Growth and Valic Company I, you can compare the effects of market volatilities on Blue Chip and Valic Company 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 Blue Chip with a short position of Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Chip and Valic Company.
Diversification Opportunities for Blue Chip and Valic Company
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Blue and Valic is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Blue Chip Growth and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I and Blue Chip 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 Blue Chip Growth are associated (or correlated) with Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Blue Chip i.e., Blue Chip and Valic Company go up and down completely randomly.
Pair Corralation between Blue Chip and Valic Company
Assuming the 90 days horizon Blue Chip Growth is expected to generate 3.01 times more return on investment than Valic Company. However, Blue Chip is 3.01 times more volatile than Valic Company I. It trades about 0.12 of its potential returns per unit of risk. Valic Company I is currently generating about -0.2 per unit of risk. If you would invest 1,867 in Blue Chip Growth on August 26, 2024 and sell it today you would earn a total of 91.00 from holding Blue Chip Growth or generate 4.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Chip Growth vs. Valic Company I
Performance |
| Timeline |
| Blue Chip Growth |
| Valic Company I |
Blue Chip and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Chip and Valic Company
The main advantage of trading using opposite Blue Chip and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Chip position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company's long position.| Blue Chip vs. Mid Cap Index | Blue Chip vs. Mid Cap Strategic | Blue Chip vs. Valic Company I | Blue Chip vs. Stock Index Fund |
| Valic Company vs. Mid Cap Index | Valic Company vs. Mid Cap Strategic | Valic Company vs. Valic Company I | Valic Company 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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