Correlation Between Valic Company and Multi-asset Real

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

Diversification Opportunities for Valic Company and Multi-asset Real

0.74

Correlation Coefficient

Valic Company  Multi-asset Real

Poor diversification

The 3 months correlation between Valic and Multi-asset is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Multi Asset Real Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Asset Real 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 Multi-asset Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Asset Real has no effect on the direction of Valic Company i.e., Valic Company and Multi-asset Real go up and down completely randomly.

Pair Corralation between Valic Company and Multi-asset Real

Assuming the 90 days horizon Valic Company I is expected to generate 0.75 times more return on investment than Multi-asset Real. However, Valic Company I is 1.34 times less risky than Multi-asset Real. It trades about -0.14 of its potential returns per unit of risk. Multi Asset Real Return is currently generating about -0.15 per unit of risk. If you would invest  1,253  in Valic Company I on December 23, 2024 and sell it today you would lose (140.00) from holding Valic Company I or give up 11.17% of portfolio value over 90 days.

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

Valic Company I  vs.  Multi Asset Real Return

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.

Multi Asset Real

Risk-Adjusted Performance

Very Weak

Over the last 90 days Multi Asset Real Return has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Valic Company and Multi-asset Real

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

The idea behind Valic Company I and Multi Asset Real Return 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..