Correlation Between Large Capital and Valic Company
Can any of the company-specific risk be diversified away by investing in both Large Capital and Valic Company 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 Large Capital and Valic Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Large Capital Growth and Valic Company I, you can compare the effects of market volatilities on Large Capital and Valic Company 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 Large Capital with a short position of Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Large Capital and Valic Company.
Diversification Opportunities for Large Capital and Valic Company
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Large and Valic is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Large Capital Growth and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I and Large Capital 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 Large Capital Growth are associated (or correlated) with Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Large Capital i.e., Large Capital and Valic Company go up and down completely randomly.
Pair Corralation between Large Capital and Valic Company
Assuming the 90 days horizon Large Capital is expected to generate 2.03 times less return on investment than Valic Company. But when comparing it to its historical volatility, Large Capital Growth is 1.42 times less risky than Valic Company. It trades about 0.1 of its potential returns per unit of risk. Valic Company I is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,038 in Valic Company I on August 31, 2024 and sell it today you would earn a total of 69.00 from holding Valic Company I or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Large Capital Growth vs. Valic Company I
Performance |
| Timeline |
| Large Capital Growth |
| Valic Company I |
Large Capital and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Large Capital and Valic Company
The main advantage of trading using opposite Large Capital and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Large Capital position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company's long position.| Large Capital vs. Goldman Sachs Government | Large Capital vs. Franklin Adjustable Government | Large Capital vs. Dreyfus Government Cash | Large Capital vs. Dws Government Money |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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