Correlation Between Aig Government and Jensen Global
Can any of the company-specific risk be diversified away by investing in both Aig Government and Jensen Global 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 Jensen Global 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 Jensen Global Quality, you can compare the effects of market volatilities on Aig Government and Jensen Global 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 Jensen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Jensen Global.
Diversification Opportunities for Aig Government and Jensen Global
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aig and Jensen is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Jensen Global Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Global Quality 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 Jensen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Global Quality has no effect on the direction of Aig Government i.e., Aig Government and Jensen Global go up and down completely randomly.
Pair Corralation between Aig Government and Jensen Global
Assuming the 90 days horizon Aig Government Money is expected to under-perform the Jensen Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aig Government Money is 3.46 times less risky than Jensen Global. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Jensen Global Quality is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,702 in Jensen Global Quality on September 14, 2024 and sell it today you would earn a total of 33.00 from holding Jensen Global Quality or generate 1.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Aig Government Money vs. Jensen Global Quality
Performance |
Timeline |
Aig Government Money |
Jensen Global Quality |
Aig Government and Jensen Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aig Government and Jensen Global
The main advantage of trading using opposite Aig Government and Jensen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Jensen Global 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 Jensen Global will offset losses from the drop in Jensen Global's long position.Aig Government vs. Simt Multi Asset Accumulation | Aig Government vs. Saat Market Growth | Aig Government vs. Simt Real Return | Aig Government vs. Simt Small Cap |
Jensen Global vs. Aig Government Money | Jensen Global vs. Intermediate Government Bond | Jensen Global vs. Goldman Sachs Government | Jensen Global vs. Schwab Government Money |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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