Correlation Between Valic Company and Investec Emerging
Can any of the company-specific risk be diversified away by investing in both Valic Company and Investec Emerging 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 Investec Emerging 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 Investec Emerging Markets, you can compare the effects of market volatilities on Valic Company and Investec Emerging 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 Investec Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Investec Emerging.
Diversification Opportunities for Valic Company and Investec Emerging
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Valic and Investec is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging Markets 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 Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Valic Company i.e., Valic Company and Investec Emerging go up and down completely randomly.
Pair Corralation between Valic Company and Investec Emerging
Assuming the 90 days horizon Valic Company is expected to generate 1.08 times less return on investment than Investec Emerging. But when comparing it to its historical volatility, Valic Company I is 1.8 times less risky than Investec Emerging. It trades about 0.11 of its potential returns per unit of risk. Investec Emerging Markets is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,115 in Investec Emerging Markets on October 26, 2024 and sell it today you would earn a total of 11.00 from holding Investec Emerging Markets or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Investec Emerging Markets
Performance |
| Timeline |
| Valic Company I |
| Investec Emerging Markets |
Valic Company and Investec Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Investec Emerging
The main advantage of trading using opposite Valic Company and Investec Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Investec Emerging 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 Investec Emerging will offset losses from the drop in Investec Emerging's long position.| Valic Company vs. Metropolitan West High | Valic Company vs. Needham Aggressive Growth | Valic Company vs. Mesirow Financial High | Valic Company vs. Virtus High Yield |
| Investec Emerging vs. Vy T Rowe | Investec Emerging vs. Valic Company I | Investec Emerging vs. Tiaa Cref Lifestyle Servative | Investec Emerging vs. Guidepath Conservative Income |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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