Correlation Between Mid-cap 15x and Valic Company

Can any of the company-specific risk be diversified away by investing in both Mid-cap 15x 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 Mid-cap 15x and Valic Company into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mid Cap 15x Strategy and Valic Company I, you can compare the effects of market volatilities on Mid-cap 15x 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 Mid-cap 15x with a short position of Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid-cap 15x and Valic Company.

Diversification Opportunities for Mid-cap 15x and Valic Company

0.92

Correlation Coefficient

Mid-cap 15x  Valic Company

Almost no diversification

The 3 months correlation between Mid-cap and Valic is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy 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 Mid-cap 15x 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 Mid Cap 15x Strategy 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 Mid-cap 15x i.e., Mid-cap 15x and Valic Company go up and down completely randomly.

Pair Corralation between Mid-cap 15x and Valic Company

Assuming the 90 days horizon Mid Cap 15x Strategy is expected to generate 1.14 times more return on investment than Valic Company. However, Mid-cap 15x is 1.14 times more volatile than Valic Company I. It trades about -0.09 of its potential returns per unit of risk. Valic Company I is currently generating about -0.13 per unit of risk. If you would invest  13,180  in Mid Cap 15x Strategy on December 20, 2024 and sell it today you would lose (1,101) from holding Mid Cap 15x Strategy or give up 8.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Mid Cap 15x Strategy  vs.  Valic Company I

Mid Cap 15x

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mid Cap 15x Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund 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 Mid-cap 15x and Valic Company

The main advantage of trading using opposite Mid-cap 15x and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid-cap 15x 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 Mid Cap 15x Strategy 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.