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Evaluating the Risk of the American General Corporation we started from looking at companys market standing from potential investors point of view First we take a look at the companies profile American General Corporation is a diversified financial services organization provides retirement services life insurance and consumer loans The company offers retail financial programs through fifteen thousand merchants American General Corp operates in 41 states Puerto Rico and the United States Virgin IslandsWell first we find out that American General Corporation is a blue chip multibillion dollar company This tells us right from the beginning that this financial giant is really worth looking at as a potential candidates to be added in our stock portfolio Considering that this is a financial company dealing with investments pension funds and life insurance we have to be very careful because these industries are most sensible to overall economy changes and we know that at this point US economy is going through the period when recession is most expected To get a better understanding of how this might affect companies risk we have to know how diversified companies investments are For that we have to evaluate companies performance compare to market performance for this purpose we use chart on returns for American General Corporation to SP 500 As we can see from the chart behavior of the company is almost identical to the behavior of the market this observation becomes more obvious when we take a look at companys beta which is 95 Well this is not such a great sign because as I already mentioned recession is expected and as we know with recession overall market returns go down this is knowing the relationship between market and AGC we can predict that American General Corp performance will decrease as well The question is how deep will the market fall and how long the recession would last of course if the recession will occur There were no
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