Correlation Between Aam Select and Us Government
Can any of the company-specific risk be diversified away by investing in both Aam Select and Us 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 Aam Select and Us Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aam Select Income and Us Government Securities, you can compare the effects of market volatilities on Aam Select and Us 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 Aam Select with a short position of Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam Select and Us Government.
Diversification Opportunities for Aam Select and Us Government
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aam and UGSFX is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Aam Select Income and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities and Aam Select 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 Aam Select Income are associated (or correlated) with Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Aam Select i.e., Aam Select and Us Government go up and down completely randomly.
Pair Corralation between Aam Select and Us Government
Assuming the 90 days horizon Aam Select Income is expected to generate 1.0 times more return on investment than Us Government. However, Aam Select is 1.0 times more volatile than Us Government Securities. It trades about 0.26 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.21 per unit of risk. If you would invest 909.00 in Aam Select Income on July 27, 2025 and sell it today you would earn a total of 38.00 from holding Aam Select Income or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aam Select Income vs. Us Government Securities
Performance |
| Timeline |
| Aam Select Income |
| Us Government Securities |
Aam Select and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam Select and Us Government
The main advantage of trading using opposite Aam Select and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam Select position performs unexpectedly, Us 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 Us Government will offset losses from the drop in Us Government's long position.| Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aambahl Gaynor Income |
| Us Government vs. Us Government Securities | Us Government vs. American Funds Strategic | Us Government vs. Vanguard Windsor Fund | Us Government vs. Vanguard Lifestrategy Growth |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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