Correlation Between Valic Company and Science Technology

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

Diversification Opportunities for Valic Company and Science Technology

0.68

Correlation Coefficient

Valic Company  Science Technology

Poor diversification

The 3 months correlation between Valic and Science is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Science Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science Technology 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 Science Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science Technology has no effect on the direction of Valic Company i.e., Valic Company and Science Technology go up and down completely randomly.

Pair Corralation between Valic Company and Science Technology

If you would invest  1,451  in Valic Company I on April 20, 2025 and sell it today you would earn a total of  737.00  from holding Valic Company I or generate 50.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.0%
Values	Daily Returns

Valic Company I  vs.  Science Technology Fund

Valic Company I

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Valic Company I are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Valic Company showed solid returns over the last few months and may actually be approaching a breakup point.

Science Technology

Risk-Adjusted Performance

Very Strong

Over the last 90 days Science Technology Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak basic indicators, Science Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Valic Company and Science Technology

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

The idea behind Valic Company I and Science Technology Fund 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.