Correlation Between Value Equity and Aig Government

Can any of the company-specific risk be diversified away by investing in both Value Equity and Aig Government 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 Value Equity and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Value Equity Investor and Aig Government Money, you can compare the effects of market volatilities on Value Equity and Aig Government 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 Value Equity with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Equity and Aig Government.

Diversification Opportunities for Value Equity and Aig Government

0.94

Correlation Coefficient

Value Equity  Aig Government

Almost no diversification

The 3 months correlation between Value and Aig is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Value Equity Investor and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money and Value Equity 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 Value Equity Investor are associated (or correlated) with Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Value Equity i.e., Value Equity and Aig Government go up and down completely randomly.

Pair Corralation between Value Equity and Aig Government

Assuming the 90 days horizon Value Equity Investor is expected to generate 8.38 times more return on investment than Aig Government. However, Value Equity is 8.38 times more volatile than Aig Government Money. It trades about 0.2 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.29 per unit of risk. If you would invest  1,676  in Value Equity Investor on May 6, 2025 and sell it today you would earn a total of  191.00  from holding Value Equity Investor or generate 11.4% return on investment over 90 days.

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

Value Equity Investor  vs.  Aig Government Money

Value Equity Investor

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Value Equity Investor are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady basic indicators, Value Equity may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Aig Government Money

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aig Government Money are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aig Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Value Equity and Aig Government

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

The idea behind Value Equity Investor and Aig Government Money 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 CEOs Directory module to screen CEOs from public companies around the world.