Correlation Between Valic Company and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both Valic Company and Wells Fargo 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 Wells Fargo 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 Wells Fargo Opportunity, you can compare the effects of market volatilities on Valic Company and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Wells Fargo.
Diversification Opportunities for Valic Company and Wells Fargo
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Valic and Wells is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Wells Fargo Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Opportunity 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Opportunity has no effect on the direction of Valic Company i.e., Valic Company and Wells Fargo go up and down completely randomly.
Pair Corralation between Valic Company and Wells Fargo
Assuming the 90 days horizon Valic Company I is expected to generate 1.95 times more return on investment than Wells Fargo. However, Valic Company is 1.95 times more volatile than Wells Fargo Opportunity. It trades about 0.1 of its potential returns per unit of risk. Wells Fargo Opportunity is currently generating about 0.15 per unit of risk. If you would invest 1,301 in Valic Company I on September 13, 2024 and sell it today you would earn a total of 70.00 from holding Valic Company I or generate 5.38% 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. Wells Fargo Opportunity
Performance |
| Timeline |
| Valic Company I |
| Wells Fargo Opportunity |
Valic Company and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Wells Fargo
The main advantage of trading using opposite Valic Company and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo'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 |
| Wells Fargo vs. Victory Rs Partners | Wells Fargo vs. Valic Company I | Wells Fargo vs. Palm Valley Capital | Wells Fargo vs. Heartland Value Plus |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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