Correlation Between Aig Government and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Aig Government and Fidelity Advisor 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 Fidelity Advisor 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 Fidelity Advisor Freedom, you can compare the effects of market volatilities on Aig Government and Fidelity Advisor 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 Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Fidelity Advisor.
Diversification Opportunities for Aig Government and Fidelity Advisor
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aig and Fidelity is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Fidelity Advisor Freedom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Freedom 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Freedom has no effect on the direction of Aig Government i.e., Aig Government and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Aig Government and Fidelity Advisor
Assuming the 90 days horizon Aig Government Money is expected to under-perform the Fidelity Advisor. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aig Government Money is 1.69 times less risky than Fidelity Advisor. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Fidelity Advisor Freedom is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,062 in Fidelity Advisor Freedom on December 28, 2024 and sell it today you would earn a total of 22.00 from holding Fidelity Advisor Freedom or generate 2.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.36% |
Values | Daily Returns |
Aig Government Money vs. Fidelity Advisor Freedom
Performance |
Timeline |
Aig Government Money |
Fidelity Advisor Freedom |
Aig Government and Fidelity Advisor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aig Government and Fidelity Advisor
The main advantage of trading using opposite Aig Government and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.Aig Government vs. Schwab Health Care | Aig Government vs. Blackrock Health Sciences | Aig Government vs. Prudential Health Sciences | Aig Government vs. The Hartford Healthcare |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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