Correlation Between Aig Government and Abbey Capital
Can any of the company-specific risk be diversified away by investing in both Aig Government and Abbey Capital 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 Aig Government and Abbey Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aig Government Money and Abbey Capital Futures, you can compare the effects of market volatilities on Aig Government and Abbey Capital 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 Aig Government with a short position of Abbey Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Abbey Capital.
Diversification Opportunities for Aig Government and Abbey Capital
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aig and Abbey is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Abbey Capital Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbey Capital Futures and Aig Government 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 Aig Government Money are associated (or correlated) with Abbey Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbey Capital Futures has no effect on the direction of Aig Government i.e., Aig Government and Abbey Capital go up and down completely randomly.
Pair Corralation between Aig Government and Abbey Capital
Assuming the 90 days horizon Aig Government Money is expected to generate 0.34 times more return on investment than Abbey Capital. However, Aig Government Money is 2.96 times less risky than Abbey Capital. It trades about 0.01 of its potential returns per unit of risk. Abbey Capital Futures is currently generating about -0.08 per unit of risk. If you would invest 1,018 in Aig Government Money on September 12, 2024 and sell it today you would earn a total of 1.00 from holding Aig Government Money or generate 0.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aig Government Money vs. Abbey Capital Futures
Performance |
Timeline |
Aig Government Money |
Abbey Capital Futures |
Aig Government and Abbey Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aig Government and Abbey Capital
The main advantage of trading using opposite Aig Government and Abbey Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Abbey Capital 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 Abbey Capital will offset losses from the drop in Abbey Capital's long position.Aig Government vs. SCOR PK | Aig Government vs. Morningstar Unconstrained Allocation | Aig Government vs. Via Renewables | Aig Government vs. Bondbloxx ETF Trust |
Abbey Capital vs. Pimco Trends Managed | Abbey Capital vs. Pimco Trends Managed | Abbey Capital vs. SCOR PK | Abbey Capital vs. Morningstar Unconstrained Allocation |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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