Correlation Between Valic Company and Midcap Sp

Can any of the company-specific risk be diversified away by investing in both Valic Company and Midcap Sp 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 Midcap Sp 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 Midcap Sp 400, you can compare the effects of market volatilities on Valic Company and Midcap Sp 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 Midcap Sp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Midcap Sp.

Diversification Opportunities for Valic Company and Midcap Sp

0.85

Correlation Coefficient

Valic Company  Midcap Sp

Very poor diversification

The 3 months correlation between Valic and Midcap is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Midcap Sp 400 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Sp 400 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 Midcap Sp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Sp 400 has no effect on the direction of Valic Company i.e., Valic Company and Midcap Sp go up and down completely randomly.

Pair Corralation between Valic Company and Midcap Sp

Assuming the 90 days horizon Valic Company I is expected to generate 1.27 times more return on investment than Midcap Sp. However, Valic Company is 1.27 times more volatile than Midcap Sp 400. It trades about 0.16 of its potential returns per unit of risk. Midcap Sp 400 is currently generating about 0.13 per unit of risk. If you would invest  1,088  in Valic Company I on May 21, 2025 and sell it today you would earn a total of  119.00  from holding Valic Company I or generate 10.94% return on investment over 90 days.

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

Valic Company I  vs.  Midcap Sp 400

Valic Company I

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valic Company I are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Valic Company may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Midcap Sp 400

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Midcap Sp 400 are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Midcap Sp may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Valic Company and Midcap Sp

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

The idea behind Valic Company I and Midcap Sp 400 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..