Correlation Between Valic Company and Artisan Value

Can any of the company-specific risk be diversified away by investing in both Valic Company and Artisan Value 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 Artisan Value 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 Artisan Value Income, you can compare the effects of market volatilities on Valic Company and Artisan Value 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 Artisan Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Artisan Value.

Diversification Opportunities for Valic Company and Artisan Value

0.69

Correlation Coefficient

Valic Company  Artisan Value

Poor diversification

The 3 months correlation between Valic and Artisan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Artisan Value Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Value 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 Artisan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Value Income has no effect on the direction of Valic Company i.e., Valic Company and Artisan Value go up and down completely randomly.

Pair Corralation between Valic Company and Artisan Value

Assuming the 90 days horizon Valic Company I is expected to generate 1.85 times more return on investment than Artisan Value. However, Valic Company is 1.85 times more volatile than Artisan Value Income. It trades about 0.05 of its potential returns per unit of risk. Artisan Value Income is currently generating about 0.07 per unit of risk. If you would invest  1,007  in Valic Company I on October 5, 2024 and sell it today you would earn a total of  269.00  from holding Valic Company I or generate 26.71% return on investment over 90 days.

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

Valic Company I  vs.  Artisan Value Income

Valic Company I

Risk-Adjusted Performance

0 of 100

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 fairly strong fundamental indicators, Valic Company is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Artisan Value Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Value Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Artisan Value 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 Artisan Value

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

The idea behind Valic Company I and Artisan Value 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.