Correlation Between Aig Government and Center Coast

Can any of the company-specific risk be diversified away by investing in both Aig Government and Center Coast 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 Center Coast 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 Center St Mlp, you can compare the effects of market volatilities on Aig Government and Center Coast 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 Center Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Center Coast.

Diversification Opportunities for Aig Government and Center Coast

-0.02

Correlation Coefficient

Aig Government  Center Coast

Good diversification

The 3 months correlation between Aig and Center is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Center St Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Center St Mlp 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 Center Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Center St Mlp has no effect on the direction of Aig Government i.e., Aig Government and Center Coast go up and down completely randomly.

Pair Corralation between Aig Government and Center Coast

Assuming the 90 days horizon Aig Government Money is expected to under-perform the Center Coast. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aig Government Money is 5.37 times less risky than Center Coast. The mutual fund trades about -0.32 of its potential returns per unit of risk. The Center St Mlp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  646.00  in Center St Mlp on October 8, 2024 and sell it today you would earn a total of  7.00  from holding Center St Mlp or generate 1.08% return on investment over 90 days.

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

Aig Government Money  vs.  Center St Mlp

Aig Government Money

Risk-Adjusted Performance

0 of 100

Very Weak

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

Center St Mlp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Center St Mlp are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Center Coast may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Aig Government and Center Coast

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

The idea behind Aig Government Money and Center St Mlp 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.