Correlation Between Valic Company and Us Small
Can any of the company-specific risk be diversified away by investing in both Valic Company and Us Small 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 Us Small 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 Us Small Cap, you can compare the effects of market volatilities on Valic Company and Us Small 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 Us Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Us Small.
Diversification Opportunities for Valic Company and Us Small
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Valic and DFSTX is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Us Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Small Cap 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 Us Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Small Cap has no effect on the direction of Valic Company i.e., Valic Company and Us Small go up and down completely randomly.
Pair Corralation between Valic Company and Us Small
Assuming the 90 days horizon Valic Company I is expected to generate 1.15 times more return on investment than Us Small. However, Valic Company is 1.15 times more volatile than Us Small Cap. It trades about 0.16 of its potential returns per unit of risk. Us Small Cap is currently generating about 0.17 per unit of risk. If you would invest 1,276 in Valic Company I on October 22, 2024 and sell it today you would earn a total of 37.00 from holding Valic Company I or generate 2.9% 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. Us Small Cap
Performance |
| Timeline |
| Valic Company I |
| Us Small Cap |
Valic Company and Us Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Us Small
The main advantage of trading using opposite Valic Company and Us Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Us Small 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 Us Small will offset losses from the drop in Us Small's long position.| Valic Company vs. Tfa Alphagen Growth | Valic Company vs. Lebenthal Lisanti Small | Valic Company vs. Ab Small Cap | Valic Company vs. Rational Defensive Growth |
| Us Small vs. Ab High Income | Us Small vs. Multi Manager High Yield | Us Small vs. Artisan High Income | Us Small vs. Aqr Risk Parity |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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