Correlation Between Valic Company and Commodities Strategy
Can any of the company-specific risk be diversified away by investing in both Valic Company and Commodities Strategy 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 Commodities Strategy 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 Commodities Strategy Fund, you can compare the effects of market volatilities on Valic Company and Commodities Strategy 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 Commodities Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Commodities Strategy.
Diversification Opportunities for Valic Company and Commodities Strategy
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Valic and Commodities is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Commodities Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodities Strategy 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 Commodities Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodities Strategy has no effect on the direction of Valic Company i.e., Valic Company and Commodities Strategy go up and down completely randomly.
Pair Corralation between Valic Company and Commodities Strategy
Assuming the 90 days horizon Valic Company I is expected to under-perform the Commodities Strategy. But the mutual fund apears to be less risky and, when comparing its historical volatility, Valic Company I is 1.93 times less risky than Commodities Strategy. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Commodities Strategy Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,881 in Commodities Strategy Fund on September 14, 2024 and sell it today you would earn a total of 92.00 from holding Commodities Strategy Fund or generate 3.19% 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. Commodities Strategy Fund
Performance |
| Timeline |
| Valic Company I |
| Commodities Strategy |
Valic Company and Commodities Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Commodities Strategy
The main advantage of trading using opposite Valic Company and Commodities Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Commodities Strategy 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 Commodities Strategy will offset losses from the drop in Commodities Strategy's long position.| Valic Company vs. Commodities Strategy Fund | Valic Company vs. Auer Growth Fund | Valic Company vs. Commonwealth Global Fund | Valic Company vs. Eic Value Fund |
| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Energy Services Fund | Commodities Strategy vs. Energy Fund Investor | Commodities Strategy vs. Real Estate Fund |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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