Correlation Between Valic Company and American Century
Can any of the company-specific risk be diversified away by investing in both Valic Company and American Century 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 American Century 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 American Century One, you can compare the effects of market volatilities on Valic Company and American Century 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 American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and American Century.
Diversification Opportunities for Valic Company and American Century
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Valic and American is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and American Century One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century One 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 American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century One has no effect on the direction of Valic Company i.e., Valic Company and American Century go up and down completely randomly.
Pair Corralation between Valic Company and American Century
Assuming the 90 days horizon Valic Company I is expected to generate 1.38 times more return on investment than American Century. However, Valic Company is 1.38 times more volatile than American Century One. It trades about 0.22 of its potential returns per unit of risk. American Century One is currently generating about 0.16 per unit of risk. If you would invest 1,276 in Valic Company I on October 24, 2024 and sell it today you would earn a total of 55.00 from holding Valic Company I or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Valic Company I vs. American Century One
Performance |
| Timeline |
| Valic Company I |
| American Century One |
Valic Company and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and American Century
The main advantage of trading using opposite Valic Company and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Valic Company vs. M Large Cap | Valic Company vs. Large Cap Growth Profund | Valic Company vs. Avantis Large Cap | Valic Company vs. Qs Large Cap |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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