Correlation Between Valic Company and Inflation Protected
Can any of the company-specific risk be diversified away by investing in both Valic Company and Inflation Protected 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 Inflation Protected 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 Inflation Protected Fund, you can compare the effects of market volatilities on Valic Company and Inflation Protected 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 Inflation Protected. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Inflation Protected.
Diversification Opportunities for Valic Company and Inflation Protected
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valic and Inflation is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Inflation Protected Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Protected 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 Inflation Protected. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Protected has no effect on the direction of Valic Company i.e., Valic Company and Inflation Protected go up and down completely randomly.
Pair Corralation between Valic Company and Inflation Protected
Assuming the 90 days horizon Valic Company I is expected to generate 2.23 times more return on investment than Inflation Protected. However, Valic Company is 2.23 times more volatile than Inflation Protected Fund. It trades about 0.1 of its potential returns per unit of risk. Inflation Protected Fund is currently generating about -0.02 per unit of risk. If you would invest 1,125 in Valic Company I on August 27, 2024 and sell it today you would earn a total of 14.00 from holding Valic Company I or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Inflation Protected Fund
Performance |
| Timeline |
| Valic Company I |
| Inflation Protected |
Valic Company and Inflation Protected Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Inflation Protected
The main advantage of trading using opposite Valic Company and Inflation Protected positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Inflation Protected 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 Inflation Protected will offset losses from the drop in Inflation Protected's long position.| Valic Company vs. Mid Cap Index | Valic Company vs. Mid Cap Strategic | Valic Company vs. Valic Company I | Valic Company vs. Valic Company I |
| Inflation Protected vs. Mid Cap Index | Inflation Protected vs. Mid Cap Strategic | Inflation Protected vs. Valic Company I | Inflation Protected vs. Valic Company I |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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