Correlation Between Valic Company and Stet California
Can any of the company-specific risk be diversified away by investing in both Valic Company and Stet California 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 Stet California 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 Stet California Municipal, you can compare the effects of market volatilities on Valic Company and Stet California 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 Stet California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Stet California.
Diversification Opportunities for Valic Company and Stet California
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Valic and Stet is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Stet California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stet California Municipal 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 Stet California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stet California Municipal has no effect on the direction of Valic Company i.e., Valic Company and Stet California go up and down completely randomly.
Pair Corralation between Valic Company and Stet California
Assuming the 90 days horizon Valic Company I is expected to generate 2.12 times more return on investment than Stet California. However, Valic Company is 2.12 times more volatile than Stet California Municipal. It trades about 0.17 of its potential returns per unit of risk. Stet California Municipal is currently generating about -0.05 per unit of risk. If you would invest 1,154 in Valic Company I on November 4, 2024 and sell it today you would earn a total of 17.00 from holding Valic Company I or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Stet California Municipal
Performance |
| Timeline |
| Valic Company I |
| Stet California Municipal |
Valic Company and Stet California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Stet California
The main advantage of trading using opposite Valic Company and Stet California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Stet California 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 Stet California will offset losses from the drop in Stet California's long position.| Valic Company vs. Rbb Fund | Valic Company vs. Furyax | Valic Company vs. Rational Dividend Capture | Valic Company vs. Fxybjx |
| Stet California vs. Pnc Balanced Allocation | Stet California vs. Growth Portfolio Class | Stet California vs. Transamerica Asset Allocation | Stet California vs. Slow Capital Growth |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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