Correlation Between Valic Company and Mutual Of
Can any of the company-specific risk be diversified away by investing in both Valic Company and Mutual Of 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 Mutual Of 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 Mutual Of America, you can compare the effects of market volatilities on Valic Company and Mutual Of 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 Mutual Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Mutual Of.
Diversification Opportunities for Valic Company and Mutual Of
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Valic and Mutual is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Mutual Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mutual Of America 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 Mutual Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mutual Of America has no effect on the direction of Valic Company i.e., Valic Company and Mutual Of go up and down completely randomly.
Pair Corralation between Valic Company and Mutual Of
Assuming the 90 days horizon Valic Company I is expected to generate 0.99 times more return on investment than Mutual Of. However, Valic Company I is 1.01 times less risky than Mutual Of. It trades about 0.09 of its potential returns per unit of risk. Mutual Of America is currently generating about 0.06 per unit of risk. If you would invest 1,163 in Valic Company I on August 26, 2024 and sell it today you would earn a total of 294.00 from holding Valic Company I or generate 25.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Mutual Of America
Performance |
| Timeline |
| Valic Company I |
| Mutual Of America |
Valic Company and Mutual Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Mutual Of
The main advantage of trading using opposite Valic Company and Mutual Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Mutual Of 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 Mutual Of will offset losses from the drop in Mutual Of's long position.| Valic Company vs. Federated Hermes Inflation | Valic Company vs. Ab Municipal Bond | Valic Company vs. Short Duration Inflation | Valic Company vs. Ab Municipal Bond |
| Mutual Of vs. Mutual Of America | Mutual Of vs. Mutual Of America | Mutual Of vs. Mutual Of America | Mutual Of vs. Mutual Of America |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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