Correlation Between Wells Fargo and Aig Government
Can any of the company-specific risk be diversified away by investing in both Wells Fargo and Aig Government 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 Wells Fargo and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wells Fargo Funds and Aig Government Money, you can compare the effects of market volatilities on Wells Fargo and Aig Government 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 Wells Fargo with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and Aig Government.
Diversification Opportunities for Wells Fargo and Aig Government
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wells and Aig is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Wells Fargo Funds and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money and Wells Fargo 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 Wells Fargo Funds are associated (or correlated) with Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Wells Fargo i.e., Wells Fargo and Aig Government go up and down completely randomly.
Pair Corralation between Wells Fargo and Aig Government
Assuming the 90 days horizon Wells Fargo Funds is expected to generate 1.07 times more return on investment than Aig Government. However, Wells Fargo is 1.07 times more volatile than Aig Government Money. It trades about 0.06 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.04 per unit of risk. If you would invest 97.00 in Wells Fargo Funds on September 4, 2024 and sell it today you would earn a total of 3.00 from holding Wells Fargo Funds or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.01% |
| Values | Daily Returns |
Wells Fargo Funds vs. Aig Government Money
Performance |
| Timeline |
| Wells Fargo Funds |
| Aig Government Money |
Wells Fargo and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wells Fargo and Aig Government
The main advantage of trading using opposite Wells Fargo and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wells Fargo position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.| Wells Fargo vs. Vanguard Total Stock | Wells Fargo vs. Vanguard 500 Index | Wells Fargo vs. Vanguard Total Stock | Wells Fargo vs. Vanguard Total Stock |
| Aig Government vs. Simt Multi Asset Accumulation | Aig Government vs. Saat Market Growth | Aig Government vs. Simt Real Return | Aig Government vs. Simt Small Cap |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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