Correlation Between Valic Company and Conservative Allocation
Can any of the company-specific risk be diversified away by investing in both Valic Company and Conservative 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 Conservative 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 Conservative Allocation Fund, you can compare the effects of market volatilities on Valic Company and Conservative 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 Conservative Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Conservative Allocation.
Diversification Opportunities for Valic Company and Conservative Allocation
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Valic and Conservative is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Conservative Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conservative 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 Conservative Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conservative Allocation has no effect on the direction of Valic Company i.e., Valic Company and Conservative Allocation go up and down completely randomly.
Pair Corralation between Valic Company and Conservative Allocation
Assuming the 90 days horizon Valic Company I is expected to generate 5.16 times more return on investment than Conservative Allocation. However, Valic Company is 5.16 times more volatile than Conservative Allocation Fund. It trades about 0.02 of its potential returns per unit of risk. Conservative Allocation Fund is currently generating about 0.1 per unit of risk. If you would invest 1,197 in Valic Company I on December 4, 2024 and sell it today you would earn a total of 66.00 from holding Valic Company I or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Conservative Allocation Fund
Performance |
| Timeline |
| Valic Company I |
| Conservative Allocation |
Valic Company and Conservative Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Conservative Allocation
The main advantage of trading using opposite Valic Company and Conservative Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Conservative 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 Conservative Allocation will offset losses from the drop in Conservative Allocation's long position.| Valic Company vs. Great West Moderately Servative | Valic Company vs. Moderate Strategy Fund | Valic Company vs. Dimensional Retirement Income | Valic Company vs. Franklin Moderate Allocation |
| Conservative Allocation vs. Prudential High Yield | Conservative Allocation vs. Ab High Income | Conservative Allocation vs. Ab High Income | Conservative Allocation vs. Pioneer High Income |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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