Correlation Between Valic Company and Ab Small
Can any of the company-specific risk be diversified away by investing in both Valic Company and Ab 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 Ab 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 Ab Small Cap, you can compare the effects of market volatilities on Valic Company and Ab 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 Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Ab Small.
Diversification Opportunities for Valic Company and Ab Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Valic and SCYVX is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab 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 Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Valic Company i.e., Valic Company and Ab Small go up and down completely randomly.
Pair Corralation between Valic Company and Ab Small
Assuming the 90 days horizon Valic Company I is expected to generate 1.01 times more return on investment than Ab Small. However, Valic Company is 1.01 times more volatile than Ab Small Cap. It trades about 0.07 of its potential returns per unit of risk. Ab Small Cap is currently generating about 0.07 per unit of risk. If you would invest 1,063 in Valic Company I on September 12, 2024 and sell it today you would earn a total of 300.00 from holding Valic Company I or generate 28.22% 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. Ab Small Cap
Performance |
| Timeline |
| Valic Company I |
| Ab Small Cap |
Valic Company and Ab Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Ab Small
The main advantage of trading using opposite Valic Company and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Ab 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 Ab Small will offset losses from the drop in Ab Small's long position.| Valic Company vs. Vanguard Small Cap Value | Valic Company vs. Vanguard Small Cap Value | Valic Company vs. Us Small Cap | Valic Company vs. Us Targeted Value |
| Ab Small vs. Vanguard Small Cap Value | Ab Small vs. Vanguard Small Cap Value | Ab Small vs. Us Small Cap | Ab Small vs. Us Targeted Value |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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