Correlation Between Valic Company and Touchstone Ultra
Can any of the company-specific risk be diversified away by investing in both Valic Company and Touchstone Ultra 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 Touchstone Ultra 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 Touchstone Ultra Short, you can compare the effects of market volatilities on Valic Company and Touchstone Ultra 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 Touchstone Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Touchstone Ultra.
Diversification Opportunities for Valic Company and Touchstone Ultra
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valic and Touchstone is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Touchstone Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Ultra Short 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 Touchstone Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Ultra Short has no effect on the direction of Valic Company i.e., Valic Company and Touchstone Ultra go up and down completely randomly.
Pair Corralation between Valic Company and Touchstone Ultra
Assuming the 90 days horizon Valic Company I is expected to generate 23.05 times more return on investment than Touchstone Ultra. However, Valic Company is 23.05 times more volatile than Touchstone Ultra Short. It trades about 0.1 of its potential returns per unit of risk. Touchstone Ultra Short is currently generating about 0.13 per unit of risk. If you would invest 1,288 in Valic Company I on November 7, 2024 and sell it today you would earn a total of 23.00 from holding Valic Company I or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Touchstone Ultra Short
Performance |
| Timeline |
| Valic Company I |
| Touchstone Ultra Short |
Valic Company and Touchstone Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Touchstone Ultra
The main advantage of trading using opposite Valic Company and Touchstone Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Touchstone Ultra 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 Touchstone Ultra will offset losses from the drop in Touchstone Ultra's long position.| Valic Company vs. Delaware Investments Ultrashort | Valic Company vs. Kentucky Tax Free Short To Medium | Valic Company vs. Dreyfus Short Intermediate | Valic Company vs. Ultra Short Fixed Income |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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