Correlation Between Valic Company and Arrow Managed
Can any of the company-specific risk be diversified away by investing in both Valic Company and Arrow Managed 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 Arrow Managed 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 Arrow Managed Futures, you can compare the effects of market volatilities on Valic Company and Arrow Managed 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 Arrow Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Arrow Managed.
Diversification Opportunities for Valic Company and Arrow Managed
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valic and Arrow is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Arrow Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Managed Futures 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 Arrow Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Managed Futures has no effect on the direction of Valic Company i.e., Valic Company and Arrow Managed go up and down completely randomly.
Pair Corralation between Valic Company and Arrow Managed
Assuming the 90 days horizon Valic Company I is expected to generate 0.72 times more return on investment than Arrow Managed. However, Valic Company I is 1.39 times less risky than Arrow Managed. It trades about 0.11 of its potential returns per unit of risk. Arrow Managed Futures is currently generating about -0.03 per unit of risk. If you would invest 1,693 in Valic Company I on September 3, 2024 and sell it today you would earn a total of 247.00 from holding Valic Company I or generate 14.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Arrow Managed Futures
Performance |
| Timeline |
| Valic Company I |
| Arrow Managed Futures |
Valic Company and Arrow Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Arrow Managed
The main advantage of trading using opposite Valic Company and Arrow Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Arrow Managed 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 Arrow Managed will offset losses from the drop in Arrow Managed's long position.| Valic Company vs. Multimanager Lifestyle Aggressive | Valic Company vs. Needham Aggressive Growth | Valic Company vs. Nuveen High Income | Valic Company vs. Calvert High Yield |
| Arrow Managed vs. Transamerica Funds | Arrow Managed vs. T Rowe Price | Arrow Managed vs. Cs 607 Tax | Arrow Managed vs. Intermediate Term Tax Free Bond |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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