Correlation Between Aig Government and Virtus Ceredex

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

Diversification Opportunities for Aig Government and Virtus Ceredex

-0.34

Correlation Coefficient

Aig Government  Virtus Ceredex

Very good diversification

The 3 months correlation between Aig and Virtus is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Virtus Ceredex Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Ceredex Small 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 Virtus Ceredex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Ceredex Small has no effect on the direction of Aig Government i.e., Aig Government and Virtus Ceredex go up and down completely randomly.

Pair Corralation between Aig Government and Virtus Ceredex

Assuming the 90 days horizon Aig Government Money is expected to generate 0.17 times more return on investment than Virtus Ceredex. However, Aig Government Money is 5.89 times less risky than Virtus Ceredex. It trades about 0.06 of its potential returns per unit of risk. Virtus Ceredex Small Cap is currently generating about -0.1 per unit of risk. If you would invest  996.00  in Aig Government Money on December 20, 2024 and sell it today you would earn a total of  6.00  from holding Aig Government Money or generate 0.6% 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.  Virtus Ceredex Small Cap

Aig Government Money

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aig Government Money are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. 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.

Virtus Ceredex Small

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Aig Government and Virtus Ceredex

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

The idea behind Aig Government Money and Virtus Ceredex Small Cap 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.