Correlation Between Valic Company and Mid Cap
Can any of the company-specific risk be diversified away by investing in both Valic Company and Mid Cap 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 Mid Cap 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 Mid Cap Index, you can compare the effects of market volatilities on Valic Company and Mid Cap 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 Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Mid Cap.
Diversification Opportunities for Valic Company and Mid Cap
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Valic and Mid is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Mid Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Index 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 Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Index has no effect on the direction of Valic Company i.e., Valic Company and Mid Cap go up and down completely randomly.
Pair Corralation between Valic Company and Mid Cap
Assuming the 90 days horizon Valic Company is expected to generate 1.12 times less return on investment than Mid Cap. In addition to that, Valic Company is 1.0 times more volatile than Mid Cap Index. It trades about 0.3 of its total potential returns per unit of risk. Mid Cap Index is currently generating about 0.34 per unit of volatility. If you would invest 2,765 in Mid Cap Index on September 2, 2024 and sell it today you would earn a total of 238.00 from holding Mid Cap Index or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Mid Cap Index
Performance |
| Timeline |
| Valic Company I |
| Mid Cap Index |
Valic Company and Mid Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Mid Cap
The main advantage of trading using opposite Valic Company and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Mid Cap 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 Mid Cap will offset losses from the drop in Mid Cap's long position.| Valic Company vs. Arrow Managed Futures | Valic Company vs. Qs Large Cap | Valic Company vs. Materials Portfolio Fidelity | Valic Company vs. Bbh Partner Fund |
| Mid Cap vs. Abr 7525 Volatility | Mid Cap vs. T Rowe Price | Mid Cap vs. Arrow Managed Futures | Mid Cap vs. Leggmason Partners Institutional |
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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