Correlation Between NYSE Composite and Aig Government
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Aig Government Money, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Aig Government.
Diversification Opportunities for NYSE Composite and Aig Government
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Aig is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Aig Government go up and down completely randomly.
Pair Corralation between NYSE Composite and Aig Government
Assuming the 90 days trading horizon NYSE Composite is expected to generate 6.94 times more return on investment than Aig Government. However, NYSE Composite is 6.94 times more volatile than Aig Government Money. It trades about 0.15 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.47 per unit of risk. If you would invest 1,901,742 in NYSE Composite on July 5, 2024 and sell it today you would earn a total of 37,026 from holding NYSE Composite or generate 1.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. Aig Government Money
Performance |
Timeline |
NYSE Composite and Aig Government Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Aig Government Money
Pair trading matchups for Aig Government
Pair Trading with NYSE Composite and Aig Government
The main advantage of trading using opposite NYSE Composite and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.NYSE Composite vs. Alto Ingredients | NYSE Composite vs. CF Industries Holdings | NYSE Composite vs. Hawkins | NYSE Composite vs. Air Products and |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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