Correlation Between Valic Company and Gold Fields
Can any of the company-specific risk be diversified away by investing in both Valic Company and Gold Fields 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 Gold Fields 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 Gold Fields Ltd, you can compare the effects of market volatilities on Valic Company and Gold Fields 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 Gold Fields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Gold Fields.
Diversification Opportunities for Valic Company and Gold Fields
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Valic and Gold is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Gold Fields Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Fields 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 Gold Fields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Fields has no effect on the direction of Valic Company i.e., Valic Company and Gold Fields go up and down completely randomly.
Pair Corralation between Valic Company and Gold Fields
Assuming the 90 days horizon Valic Company I is expected to generate 0.16 times more return on investment than Gold Fields. However, Valic Company I is 6.26 times less risky than Gold Fields. It trades about -0.01 of its potential returns per unit of risk. Gold Fields Ltd is currently generating about -0.31 per unit of risk. If you would invest 1,450 in Valic Company I on August 23, 2024 and sell it today you would lose (2.00) from holding Valic Company I or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Gold Fields Ltd
Performance |
| Timeline |
| Valic Company I |
| Gold Fields |
Valic Company and Gold Fields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Gold Fields
The main advantage of trading using opposite Valic Company and Gold Fields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Gold Fields 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 Gold Fields will offset losses from the drop in Gold Fields' long position.| Valic Company vs. ABIVAX Socit Anonyme | Valic Company vs. SCOR PK | Valic Company vs. HUMANA INC | Valic Company vs. Aquagold International |
| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Pan American Silver | Gold Fields vs. Kinross Gold | Gold Fields vs. B2Gold Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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