Correlation Between Valic Company and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Valic Company and Growth Fund 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 Growth Fund 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 Growth Fund Of, you can compare the effects of market volatilities on Valic Company and Growth Fund 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 Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Growth Fund.
Diversification Opportunities for Valic Company and Growth Fund
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Valic and GROWTH is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund 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 Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of Valic Company i.e., Valic Company and Growth Fund go up and down completely randomly.
Pair Corralation between Valic Company and Growth Fund
Assuming the 90 days horizon Valic Company is expected to generate 7.28 times less return on investment than Growth Fund. But when comparing it to its historical volatility, Valic Company I is 2.04 times less risky than Growth Fund. It trades about 0.05 of its potential returns per unit of risk. Growth Fund Of is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 7,723 in Growth Fund Of on August 24, 2024 and sell it today you would earn a total of 296.00 from holding Growth Fund Of or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Valic Company I vs. Growth Fund Of
Performance |
| Timeline |
| Valic Company I |
| Growth Fund |
Valic Company and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Growth Fund
The main advantage of trading using opposite Valic Company and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Growth Fund 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| Valic Company vs. Prudential Jennison Financial | Valic Company vs. Gabelli Global Financial | Valic Company vs. Vanguard Financials Index | Valic Company vs. John Hancock Financial |
| Growth Fund vs. Artisan Small Cap | Growth Fund vs. L Abbett Growth | Growth Fund vs. Ab Centrated Growth | Growth Fund vs. Franklin Growth Opportunities |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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