Correlation Between Valic Company and Asset Allocation
Can any of the company-specific risk be diversified away by investing in both Valic Company and Asset Allocation 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 Asset Allocation 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 Asset Allocation Fund, you can compare the effects of market volatilities on Valic Company and Asset Allocation 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 Asset Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Asset Allocation.
Diversification Opportunities for Valic Company and Asset Allocation
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Valic and Asset is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Asset Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asset Allocation 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 Asset Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asset Allocation has no effect on the direction of Valic Company i.e., Valic Company and Asset Allocation go up and down completely randomly.
Pair Corralation between Valic Company and Asset Allocation
Assuming the 90 days horizon Valic Company I is expected to generate 2.11 times more return on investment than Asset Allocation. However, Valic Company is 2.11 times more volatile than Asset Allocation Fund. It trades about 0.2 of its potential returns per unit of risk. Asset Allocation Fund is currently generating about 0.09 per unit of risk. If you would invest 1,838 in Valic Company I on August 27, 2024 and sell it today you would earn a total of 95.00 from holding Valic Company I or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Asset Allocation Fund
Performance |
| Timeline |
| Valic Company I |
| Asset Allocation |
Valic Company and Asset Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Asset Allocation
The main advantage of trading using opposite Valic Company and Asset Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Asset Allocation 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 Asset Allocation will offset losses from the drop in Asset Allocation's long position.| Valic Company vs. Mid Cap Index | Valic Company vs. Mid Cap Strategic | Valic Company vs. Valic Company I | Valic Company vs. Valic Company I |
| Asset Allocation vs. Mid Cap Index | Asset Allocation vs. Mid Cap Strategic | Asset Allocation vs. Valic Company I | Asset Allocation vs. Valic Company I |
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 Stocks Directory module to find actively traded stocks across global markets.
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