Correlation Between Valic Company and Msift High
Can any of the company-specific risk be diversified away by investing in both Valic Company and Msift High 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 Msift High 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 Msift High Yield, you can compare the effects of market volatilities on Valic Company and Msift High 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 Msift High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Msift High.
Diversification Opportunities for Valic Company and Msift High
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Valic and MSIFT is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Msift High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msift High Yield 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 Msift High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Msift High Yield has no effect on the direction of Valic Company i.e., Valic Company and Msift High go up and down completely randomly.
Pair Corralation between Valic Company and Msift High
Assuming the 90 days horizon Valic Company is expected to generate 1.01 times less return on investment than Msift High. In addition to that, Valic Company is 1.16 times more volatile than Msift High Yield. It trades about 0.11 of its total potential returns per unit of risk. Msift High Yield is currently generating about 0.13 per unit of volatility. If you would invest 725.00 in Msift High Yield on January 10, 2025 and sell it today you would earn a total of 91.00 from holding Msift High Yield or generate 12.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Msift High Yield
Performance |
| Timeline |
| Valic Company I |
| Msift High Yield |
Valic Company and Msift High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Msift High
The main advantage of trading using opposite Valic Company and Msift High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Msift High 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 Msift High will offset losses from the drop in Msift High's long position.| Valic Company vs. Goldman Sachs Clean | Valic Company vs. Gabelli Gold Fund | Valic Company vs. Invesco Gold Special | Valic Company vs. The Gold Bullion |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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