Correlation Between Valic Company and Ultrabear Profund

Can any of the company-specific risk be diversified away by investing in both Valic Company and Ultrabear Profund 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 Ultrabear Profund 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 Ultrabear Profund Ultrabear, you can compare the effects of market volatilities on Valic Company and Ultrabear Profund 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 Ultrabear Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Ultrabear Profund.

Diversification Opportunities for Valic Company and Ultrabear Profund

-0.91

Correlation Coefficient

Valic Company  Ultrabear Profund

Pay attention - limited upside

The 3 months correlation between Valic and Ultrabear is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Ultrabear Profund Ultrabear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrabear Profund 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 Ultrabear Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrabear Profund has no effect on the direction of Valic Company i.e., Valic Company and Ultrabear Profund go up and down completely randomly.

Pair Corralation between Valic Company and Ultrabear Profund

Assuming the 90 days horizon Valic Company I is expected to under-perform the Ultrabear Profund. But the mutual fund apears to be less risky and, when comparing its historical volatility, Valic Company I is 1.15 times less risky than Ultrabear Profund. The mutual fund trades about -0.14 of its potential returns per unit of risk. The Ultrabear Profund Ultrabear is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  858.00  in Ultrabear Profund Ultrabear on September 12, 2024 and sell it today you would lose (3.00) from holding Ultrabear Profund Ultrabear or give up 0.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Valic Company I  vs.  Ultrabear Profund Ultrabear

Valic Company I

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Valic Company I are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Valic Company may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ultrabear Profund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ultrabear Profund Ultrabear has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Valic Company and Ultrabear Profund

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

The idea behind Valic Company I and Ultrabear Profund Ultrabear 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.