Correlation Between Valic Company and Western Asset
Can any of the company-specific risk be diversified away by investing in both Valic Company and Western Asset 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 Western Asset 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 Western Asset Total, you can compare the effects of market volatilities on Valic Company and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Western Asset.
Diversification Opportunities for Valic Company and Western Asset
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Valic and WESTERN is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Western Asset Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Total 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Total has no effect on the direction of Valic Company i.e., Valic Company and Western Asset go up and down completely randomly.
Pair Corralation between Valic Company and Western Asset
Assuming the 90 days horizon Valic Company I is expected to generate 2.47 times more return on investment than Western Asset. However, Valic Company is 2.47 times more volatile than Western Asset Total. It trades about 0.05 of its potential returns per unit of risk. Western Asset Total is currently generating about 0.1 per unit of risk. If you would invest 1,441 in Valic Company I on August 24, 2024 and sell it today you would earn a total of 7.00 from holding Valic Company I or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Valic Company I vs. Western Asset Total
Performance |
| Timeline |
| Valic Company I |
| Western Asset Total |
Valic Company and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Western Asset
The main advantage of trading using opposite Valic Company and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. Nuveen All American Municipal | Western Asset vs. Bbh Intermediate Municipal | Western Asset vs. Pace Municipal Fixed | Western Asset vs. Vanguard Short Term Government |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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