Correlation Between Valic Company and Aam/bahl Gaynor

Can any of the company-specific risk be diversified away by investing in both Valic Company and Aam/bahl Gaynor 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 Valic Company and Aam/bahl Gaynor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Valic Company I and Aambahl Gaynor Income, you can compare the effects of market volatilities on Valic Company and Aam/bahl Gaynor 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 Valic Company with a short position of Aam/bahl Gaynor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Aam/bahl Gaynor.

Diversification Opportunities for Valic Company and Aam/bahl Gaynor

0.46

Correlation Coefficient

Valic Company  Aam/bahl Gaynor

Very weak diversification

The 3 months correlation between Valic and Aam/bahl is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Aambahl Gaynor Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aambahl Gaynor Income and Valic Company 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 Valic Company I are associated (or correlated) with Aam/bahl Gaynor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aambahl Gaynor Income has no effect on the direction of Valic Company i.e., Valic Company and Aam/bahl Gaynor go up and down completely randomly.

Pair Corralation between Valic Company and Aam/bahl Gaynor

Assuming the 90 days horizon Valic Company I is expected to under-perform the Aam/bahl Gaynor. In addition to that, Valic Company is 1.9 times more volatile than Aambahl Gaynor Income. It trades about -0.13 of its total potential returns per unit of risk. Aambahl Gaynor Income is currently generating about 0.03 per unit of volatility. If you would invest  2,488  in Aambahl Gaynor Income on December 21, 2024 and sell it today you would earn a total of  26.00  from holding Aambahl Gaynor Income or generate 1.05% return on investment over 90 days.

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

Valic Company I  vs.  Aambahl Gaynor Income

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.

Aambahl Gaynor Income

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aambahl Gaynor Income are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Aam/bahl Gaynor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Valic Company and Aam/bahl Gaynor

The main advantage of trading using opposite Valic Company and Aam/bahl Gaynor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Aam/bahl Gaynor 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 Aam/bahl Gaynor will offset losses from the drop in Aam/bahl Gaynor's long position.

The idea behind Valic Company I and Aambahl Gaynor Income 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.