Correlation Between California Municipal and Aig Government
Can any of the company-specific risk be diversified away by investing in both California Municipal 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 California Municipal and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Municipal Portfolio and Aig Government Money, you can compare the effects of market volatilities on California Municipal 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 California Municipal with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Municipal and Aig Government.
Diversification Opportunities for California Municipal and Aig Government
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between California and Aig is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding California Municipal Portfolio 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 California Municipal 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 California Municipal Portfolio 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 California Municipal i.e., California Municipal and Aig Government go up and down completely randomly.
Pair Corralation between California Municipal and Aig Government
Assuming the 90 days horizon California Municipal is expected to generate 1.86 times less return on investment than Aig Government. But when comparing it to its historical volatility, California Municipal Portfolio is 1.11 times less risky than Aig Government. It trades about 0.15 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 988.00 in Aig Government Money on May 2, 2025 and sell it today you would earn a total of 15.00 from holding Aig Government Money or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
California Municipal Portfolio vs. Aig Government Money
Performance |
| Timeline |
| California Municipal |
| Aig Government Money |
California Municipal and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Municipal and Aig Government
The main advantage of trading using opposite California Municipal and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Municipal 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.| California Municipal vs. Ab New York | California Municipal vs. Opnhmr Rchstr Ltd | California Municipal vs. California Municipal Portfolio | California Municipal vs. Ab National Portfolio |
| Aig Government vs. Pace Smallmedium Value | Aig Government vs. American Century Etf | Aig Government vs. Great West Loomis Sayles | Aig Government vs. Vanguard Small Cap Value |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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