Correlation Between Valic Company and Income Fund
Can any of the company-specific risk be diversified away by investing in both Valic Company and Income Fund 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 Income Fund 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 Income Fund Income, you can compare the effects of market volatilities on Valic Company and Income Fund 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 Income Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Income Fund.
Diversification Opportunities for Valic Company and Income Fund
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Valic and Income is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Income Fund Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Fund Income 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 Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund Income has no effect on the direction of Valic Company i.e., Valic Company and Income Fund go up and down completely randomly.
Pair Corralation between Valic Company and Income Fund
Assuming the 90 days horizon Valic Company I is expected to generate 4.53 times more return on investment than Income Fund. However, Valic Company is 4.53 times more volatile than Income Fund Income. It trades about 0.13 of its potential returns per unit of risk. Income Fund Income is currently generating about -0.08 per unit of risk. If you would invest 1,238 in Valic Company I on September 12, 2024 and sell it today you would earn a total of 133.00 from holding Valic Company I or generate 10.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Valic Company I vs. Income Fund Income
Performance |
Timeline |
Valic Company I |
Income Fund Income |
Valic Company and Income Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Valic Company and Income Fund
The main advantage of trading using opposite Valic Company and Income Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Income Fund 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 Income Fund will offset losses from the drop in Income Fund's long position.Valic Company vs. Mid Cap Index | Valic Company vs. Mid Cap Strategic | Valic Company vs. Valic Company I | Valic Company vs. Valic Company I |
Income Fund vs. Queens Road Small | Income Fund vs. Heartland Value Plus | Income Fund vs. William Blair Small | Income Fund vs. Valic Company I |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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