Correlation Between FG Annuities and Aviva PLC

Can any of the company-specific risk be diversified away by investing in both FG Annuities and Aviva PLC 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 FG Annuities and Aviva PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FG Annuities Life and Aviva PLC ADR, you can compare the effects of market volatilities on FG Annuities and Aviva PLC 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 FG Annuities with a short position of Aviva PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of FG Annuities and Aviva PLC.

Diversification Opportunities for FG Annuities and Aviva PLC

-0.51

Correlation Coefficient

FG Annuities  Aviva PLC

Excellent diversification

The 3 months correlation between FG Annuities and Aviva is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding FG Annuities Life and Aviva PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aviva PLC ADR and FG Annuities 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 FG Annuities Life are associated (or correlated) with Aviva PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aviva PLC ADR has no effect on the direction of FG Annuities i.e., FG Annuities and Aviva PLC go up and down completely randomly.

Pair Corralation between FG Annuities and Aviva PLC

If you would invest  4,240  in FG Annuities Life on September 23, 2024 and sell it today you would lose (63.00) from holding FG Annuities Life or give up 1.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.54%
Values	Daily Returns

FG Annuities Life  vs.  Aviva PLC ADR

FG Annuities Life

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FG Annuities Life has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, FG Annuities is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Aviva PLC ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aviva PLC ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Aviva PLC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FG Annuities and Aviva PLC

The main advantage of trading using opposite FG Annuities and Aviva PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FG Annuities position performs unexpectedly, Aviva PLC 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 Aviva PLC will offset losses from the drop in Aviva PLC's long position.

The idea behind FG Annuities Life and Aviva PLC ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.