Correlation Between Valic Company and Multi-manager High
Can any of the company-specific risk be diversified away by investing in both Valic Company and Multi-manager 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 Multi-manager 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 Multi Manager High Yield, you can compare the effects of market volatilities on Valic Company and Multi-manager 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 Multi-manager High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Multi-manager High.
Diversification Opportunities for Valic Company and Multi-manager High
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Valic and Multi-manager is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Multi Manager High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager High 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 Multi-manager High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager High has no effect on the direction of Valic Company i.e., Valic Company and Multi-manager High go up and down completely randomly.
Pair Corralation between Valic Company and Multi-manager High
Assuming the 90 days horizon Valic Company I is expected to generate 1.25 times more return on investment than Multi-manager High. However, Valic Company is 1.25 times more volatile than Multi Manager High Yield. It trades about 0.12 of its potential returns per unit of risk. Multi Manager High Yield is currently generating about 0.14 per unit of risk. If you would invest 610.00 in Valic Company I on September 2, 2024 and sell it today you would earn a total of 119.00 from holding Valic Company I or generate 19.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Multi Manager High Yield
Performance |
| Timeline |
| Valic Company I |
| Multi Manager High |
Valic Company and Multi-manager High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Multi-manager High
The main advantage of trading using opposite Valic Company and Multi-manager High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Multi-manager 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 Multi-manager High will offset losses from the drop in Multi-manager High's long position.| Valic Company vs. Mid Cap Index | Valic Company vs. Mid Cap Strategic | Valic Company vs. Stock Index Fund | Valic Company vs. Broad Cap Value |
| Multi-manager High vs. Goldman Sachs Financial | Multi-manager High vs. Angel Oak Financial | Multi-manager High vs. Transamerica Financial Life | Multi-manager High vs. Vanguard Financials Index |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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