Correlation Between Valic Company and Small-cap Growth
Can any of the company-specific risk be diversified away by investing in both Valic Company and Small-cap Growth 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 Small-cap Growth 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 Small Cap Growth Profund, you can compare the effects of market volatilities on Valic Company and Small-cap Growth 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 Small-cap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Small-cap Growth.
Diversification Opportunities for Valic Company and Small-cap Growth
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Valic and Small-cap is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Small Cap Growth Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Growth 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 Small-cap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Growth has no effect on the direction of Valic Company i.e., Valic Company and Small-cap Growth go up and down completely randomly.
Pair Corralation between Valic Company and Small-cap Growth
Assuming the 90 days horizon Valic Company I is expected to generate 1.02 times more return on investment than Small-cap Growth. However, Valic Company is 1.02 times more volatile than Small Cap Growth Profund. It trades about 0.26 of its potential returns per unit of risk. Small Cap Growth Profund is currently generating about 0.25 per unit of risk. If you would invest 989.00 in Valic Company I on April 10, 2025 and sell it today you would earn a total of 190.00 from holding Valic Company I or generate 19.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Small Cap Growth Profund
Performance |
| Timeline |
| Valic Company I |
| Small Cap Growth |
Valic Company and Small-cap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Small-cap Growth
The main advantage of trading using opposite Valic Company and Small-cap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Small-cap Growth 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 Small-cap Growth will offset losses from the drop in Small-cap Growth's long position.| Valic Company vs. Quantitative U S | Valic Company vs. Old Westbury Small | Valic Company vs. Harbor Small Cap | Valic Company vs. Ashmore Emerging Markets |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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