Correlation Between Valic Company and International Equities
Can any of the company-specific risk be diversified away by investing in both Valic Company and International Equities 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 Equities 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 Equities Index, you can compare the effects of market volatilities on Valic Company and International Equities 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 Equities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and International Equities.
Diversification Opportunities for Valic Company and International Equities
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Valic and International is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and International Equities Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Equities 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 Equities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Equities has no effect on the direction of Valic Company i.e., Valic Company and International Equities go up and down completely randomly.
Pair Corralation between Valic Company and International Equities
Assuming the 90 days horizon Valic Company I is expected to generate 0.81 times more return on investment than International Equities. However, Valic Company I is 1.24 times less risky than International Equities. It trades about 0.24 of its potential returns per unit of risk. International Equities Index is currently generating about -0.12 per unit of risk. If you would invest 1,272 in Valic Company I on August 31, 2024 and sell it today you would earn a total of 47.00 from holding Valic Company I or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. International Equities Index
Performance |
| Timeline |
| Valic Company I |
| International Equities |
Valic Company and International Equities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and International Equities
The main advantage of trading using opposite Valic Company and International Equities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, International Equities 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 Equities will offset losses from the drop in International Equities' long position.| Valic Company vs. Nationwide Inflation Protected Securities | Valic Company vs. Lord Abbett Inflation | Valic Company vs. Asg Managed Futures | Valic Company vs. Aqr Managed Futures |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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