Correlation Between Valic Company and Bny Mellon

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

Diversification Opportunities for Valic Company and Bny Mellon

-0.69

Correlation Coefficient

Valic Company  Bny Mellon

Excellent diversification

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

Pair Corralation between Valic Company and Bny Mellon

Assuming the 90 days horizon Valic Company I is expected to under-perform the Bny Mellon. In addition to that, Valic Company is 20.93 times more volatile than Bny Mellon Short Term. It trades about -0.14 of its total potential returns per unit of risk. Bny Mellon Short Term is currently generating about 0.31 per unit of volatility. If you would invest  1,101  in Bny Mellon Short Term on December 19, 2024 and sell it today you would earn a total of  13.00  from holding Bny Mellon Short Term or generate 1.18% return on investment over 90 days.

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

Valic Company I  vs.  Bny Mellon Short Term

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.

Bny Mellon Short

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bny Mellon Short Term are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Bny Mellon 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 Bny Mellon

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

The idea behind Valic Company I and Bny Mellon Short Term 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.