Correlation Between Valic Company and Federated Institutional
Can any of the company-specific risk be diversified away by investing in both Valic Company and Federated Institutional 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 Federated Institutional 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 Federated Institutional High, you can compare the effects of market volatilities on Valic Company and Federated Institutional 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 Federated Institutional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Federated Institutional.
Diversification Opportunities for Valic Company and Federated Institutional
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Valic and Federated is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Federated Institutional High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Institutional 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 Federated Institutional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Institutional has no effect on the direction of Valic Company i.e., Valic Company and Federated Institutional go up and down completely randomly.
Pair Corralation between Valic Company and Federated Institutional
Assuming the 90 days horizon Valic Company I is expected to generate 1.3 times more return on investment than Federated Institutional. However, Valic Company is 1.3 times more volatile than Federated Institutional High. It trades about 0.31 of its potential returns per unit of risk. Federated Institutional High is currently generating about 0.13 per unit of risk. If you would invest 722.00 in Valic Company I on September 4, 2024 and sell it today you would earn a total of 8.00 from holding Valic Company I or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Valic Company I vs. Federated Institutional High
Performance |
| Timeline |
| Valic Company I |
| Federated Institutional |
Valic Company and Federated Institutional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Federated Institutional
The main advantage of trading using opposite Valic Company and Federated Institutional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Federated Institutional 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 Federated Institutional will offset losses from the drop in Federated Institutional's long position.| Valic Company vs. T Rowe Price | Valic Company vs. Virtus High Yield | Valic Company vs. Calvert High Yield | Valic Company vs. Ppm High Yield |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |