Correlation Between Valic Company and Sp Midcap
Can any of the company-specific risk be diversified away by investing in both Valic Company and Sp Midcap 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 Sp Midcap 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 Sp Midcap Index, you can compare the effects of market volatilities on Valic Company and Sp Midcap 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 Sp Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Sp Midcap.
Diversification Opportunities for Valic Company and Sp Midcap
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Valic and SPMIX is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Sp Midcap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp Midcap Index 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 Sp Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp Midcap Index has no effect on the direction of Valic Company i.e., Valic Company and Sp Midcap go up and down completely randomly.
Pair Corralation between Valic Company and Sp Midcap
Assuming the 90 days horizon Valic Company I is expected to generate 0.7 times more return on investment than Sp Midcap. However, Valic Company I is 1.42 times less risky than Sp Midcap. It trades about -0.09 of its potential returns per unit of risk. Sp Midcap Index is currently generating about -0.19 per unit of risk. If you would invest 1,337 in Valic Company I on October 16, 2024 and sell it today you would lose (57.00) from holding Valic Company I or give up 4.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.44% |
| Values | Daily Returns |
Valic Company I vs. Sp Midcap Index
Performance |
| Timeline |
| Valic Company I |
| Sp Midcap Index |
Valic Company and Sp Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Sp Midcap
The main advantage of trading using opposite Valic Company and Sp Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Sp Midcap 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 Sp Midcap will offset losses from the drop in Sp Midcap's long position.| Valic Company vs. Pace Strategic Fixed | Valic Company vs. Bbh Intermediate Municipal | Valic Company vs. Multisector Bond Sma | Valic Company vs. Gmo High Yield |
| Sp Midcap vs. Boston Partners Small | Sp Midcap vs. Fidelity Small Cap | Sp Midcap vs. Valic Company I | Sp Midcap vs. William Blair Small |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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