Correlation Between Inflation Protected and Valic Company
Can any of the company-specific risk be diversified away by investing in both Inflation Protected 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 Inflation Protected and Valic Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflation Protected Fund and Valic Company I, you can compare the effects of market volatilities on Inflation Protected 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 Inflation Protected with a short position of Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation Protected and Valic Company.
Diversification Opportunities for Inflation Protected and Valic Company
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Inflation and Valic is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Protected Fund 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 Inflation Protected 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 Inflation Protected Fund 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 Inflation Protected i.e., Inflation Protected and Valic Company go up and down completely randomly.
Pair Corralation between Inflation Protected and Valic Company
Assuming the 90 days horizon Inflation Protected Fund is expected to under-perform the Valic Company. But the mutual fund apears to be less risky and, when comparing its historical volatility, Inflation Protected Fund is 4.01 times less risky than Valic Company. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Valic Company I is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,038 in Valic Company I on August 31, 2024 and sell it today you would earn a total of 69.00 from holding Valic Company I or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflation Protected Fund vs. Valic Company I
Performance |
| Timeline |
| Inflation Protected |
| Valic Company I |
Inflation Protected and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflation Protected and Valic Company
The main advantage of trading using opposite Inflation Protected and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflation Protected 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.| Inflation Protected vs. Federated Ultrashort Bond | Inflation Protected vs. Maryland Tax Free Bond | Inflation Protected vs. Multisector Bond Sma | Inflation Protected vs. Ms Global Fixed |
| Valic Company vs. Global Gold Fund | Valic Company vs. Vy Goldman Sachs | Valic Company vs. Franklin Gold Precious | Valic Company vs. Goldman Sachs Clean |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |