Correlation Between Valic Company and Johnson Institutional
Can any of the company-specific risk be diversified away by investing in both Valic Company and Johnson Institutional 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 Johnson Institutional 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 Johnson Institutional Intermediate, you can compare the effects of market volatilities on Valic Company and Johnson Institutional 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 Johnson Institutional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Johnson Institutional.
Diversification Opportunities for Valic Company and Johnson Institutional
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Valic and Johnson is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Johnson Institutional Intermed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Institutional 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 Johnson Institutional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Institutional has no effect on the direction of Valic Company i.e., Valic Company and Johnson Institutional go up and down completely randomly.
Pair Corralation between Valic Company and Johnson Institutional
Assuming the 90 days horizon Valic Company I is expected to generate 5.19 times more return on investment than Johnson Institutional. However, Valic Company is 5.19 times more volatile than Johnson Institutional Intermediate. It trades about 0.05 of its potential returns per unit of risk. Johnson Institutional Intermediate is currently generating about 0.07 per unit of risk. If you would invest 1,167 in Valic Company I on September 14, 2024 and sell it today you would earn a total of 186.00 from holding Valic Company I or generate 15.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Johnson Institutional Intermed
Performance |
| Timeline |
| Valic Company I |
| Johnson Institutional |
Valic Company and Johnson Institutional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Johnson Institutional
The main advantage of trading using opposite Valic Company and Johnson Institutional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Johnson Institutional 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 Johnson Institutional will offset losses from the drop in Johnson Institutional'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 |
| Johnson Institutional vs. Johnson Core Plus | Johnson Institutional vs. Johnson Enhanced Return | Johnson Institutional vs. Johnson Equity Income | Johnson Institutional vs. Johnson Equity 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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