Correlation Between Valic Company and Global Bond
Can any of the company-specific risk be diversified away by investing in both Valic Company and Global Bond 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 Global Bond 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 Global Bond Fund, you can compare the effects of market volatilities on Valic Company and Global Bond 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 Global Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Global Bond.
Diversification Opportunities for Valic Company and Global Bond
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valic and Global is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Global Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Bond Fund 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 Global Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Bond Fund has no effect on the direction of Valic Company i.e., Valic Company and Global Bond go up and down completely randomly.
Pair Corralation between Valic Company and Global Bond
Assuming the 90 days horizon Valic Company I is expected to under-perform the Global Bond. In addition to that, Valic Company is 6.78 times more volatile than Global Bond Fund. It trades about -0.12 of its total potential returns per unit of risk. Global Bond Fund is currently generating about 0.3 per unit of volatility. If you would invest 958.00 in Global Bond Fund on December 4, 2024 and sell it today you would earn a total of 8.00 from holding Global Bond Fund or generate 0.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Valic Company I vs. Global Bond Fund
Performance |
Timeline |
Valic Company I |
Global Bond Fund |
Valic Company and Global Bond Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Valic Company and Global Bond
The main advantage of trading using opposite Valic Company and Global Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Global Bond 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 Global Bond will offset losses from the drop in Global Bond's long position.Valic Company vs. Great West Moderately Servative | Valic Company vs. Moderate Strategy Fund | Valic Company vs. Dimensional Retirement Income | Valic Company vs. Franklin Moderate Allocation |
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Check out your portfolio center.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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