Correlation Between Valic Company and State Street

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

Diversification Opportunities for Valic Company and State Street

0.87

Correlation Coefficient

Valic Company  State Street

Very poor diversification

The 3 months correlation between Valic and State is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and State Street Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Core 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Core has no effect on the direction of Valic Company i.e., Valic Company and State Street go up and down completely randomly.

Pair Corralation between Valic Company and State Street

Assuming the 90 days horizon Valic Company I is expected to generate 1.99 times more return on investment than State Street. However, Valic Company is 1.99 times more volatile than State Street Core. It trades about 0.19 of its potential returns per unit of risk. State Street Core is currently generating about 0.3 per unit of risk. If you would invest  1,110  in Valic Company I on June 20, 2025 and sell it today you would earn a total of  153.00  from holding Valic Company I or generate 13.78% 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.  State Street Core

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 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Valic Company showed solid returns over the last few months and may actually be approaching a breakup point.

State Street Core

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in State Street Core are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, State Street may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Valic Company and State Street

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

The idea behind Valic Company I and State Street Core 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .