Correlation Between Money Market and Valic Company

Can any of the company-specific risk be diversified away by investing in both Money Market and Valic Company 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 Money Market and Valic Company into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Money Market Obligations and Valic Company I, you can compare the effects of market volatilities on Money Market and Valic Company 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 Money Market with a short position of Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Money Market and Valic Company.

Diversification Opportunities for Money Market and Valic Company

0.0

Correlation Coefficient

Money Market  Valic Company

Pay attention - limited upside

The 3 months correlation between Money and Valic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Money Market Obligations and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I and Money Market 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 Money Market Obligations are associated (or correlated) with Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Money Market i.e., Money Market and Valic Company go up and down completely randomly.

Pair Corralation between Money Market and Valic Company

If you would invest  100.00  in Money Market Obligations on December 19, 2024 and sell it today you would earn a total of  0.00  from holding Money Market Obligations or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	71.19%
Values	Daily Returns

Money Market Obligations  vs.  Valic Company I

Money Market Obligations

Risk-Adjusted Performance

Very Weak

Over the last 90 days Money Market Obligations has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Money Market is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Valic Company I

Risk-Adjusted Performance

Very Weak

Over the last 90 days Valic Company I has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Money Market and Valic Company

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

The idea behind Money Market Obligations and Valic Company I 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.