Correlation Between Intermediate-term and Valic Company
Can any of the company-specific risk be diversified away by investing in both Intermediate-term and Valic Company 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 Intermediate-term and Valic Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Term Tax Free Bond and Valic Company I, you can compare the effects of market volatilities on Intermediate-term and Valic Company 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 Intermediate-term with a short position of Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate-term and Valic Company.
Diversification Opportunities for Intermediate-term and Valic Company
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Intermediate-term and Valic is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Term Tax Free Bon and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I and Intermediate-term 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 Intermediate Term Tax Free Bond are associated (or correlated) with Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Intermediate-term i.e., Intermediate-term and Valic Company go up and down completely randomly.
Pair Corralation between Intermediate-term and Valic Company
Assuming the 90 days horizon Intermediate-term is expected to generate 7.25 times less return on investment than Valic Company. But when comparing it to its historical volatility, Intermediate Term Tax Free Bond is 6.83 times less risky than Valic Company. It trades about 0.13 of its potential returns per unit of risk. Valic Company I is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,675 in Valic Company I on May 28, 2025 and sell it today you would earn a total of 92.00 from holding Valic Company I or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intermediate Term Tax Free Bon vs. Valic Company I
Performance |
| Timeline |
| Intermediate Term Tax |
| Valic Company I |
Intermediate-term and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate-term and Valic Company
The main advantage of trading using opposite Intermediate-term and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate-term position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company's long position.| Intermediate-term vs. Vanguard Energy Index | Intermediate-term vs. Adams Natural Resources | Intermediate-term vs. Franklin Natural Resources | Intermediate-term vs. Gmo Resources |
| Valic Company vs. Franklin Adjustable Government | Valic Company vs. Old Westbury Municipal | Valic Company vs. Intermediate Term Tax Free Bond | Valic Company vs. Bbh Intermediate Municipal |
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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