Correlation Between Ab All and Aim Investment

Can any of the company-specific risk be diversified away by investing in both Ab All and Aim Investment 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 Ab All and Aim Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab All Market and Aim Investment Securities, you can compare the effects of market volatilities on Ab All and Aim Investment 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 Ab All with a short position of Aim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab All and Aim Investment.

Diversification Opportunities for Ab All and Aim Investment

-0.09

Correlation Coefficient

Ab All  Aim Investment

Good diversification

The 3 months correlation between AMTOX and Aim is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ab All Market and Aim Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Investment Securities and Ab All 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 Ab All Market are associated (or correlated) with Aim Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim Investment Securities has no effect on the direction of Ab All i.e., Ab All and Aim Investment go up and down completely randomly.

Pair Corralation between Ab All and Aim Investment

Assuming the 90 days horizon Ab All Market is expected to under-perform the Aim Investment. In addition to that, Ab All is 4.02 times more volatile than Aim Investment Securities. It trades about -0.11 of its total potential returns per unit of risk. Aim Investment Securities is currently generating about -0.01 per unit of volatility. If you would invest  2,558  in Aim Investment Securities on September 15, 2024 and sell it today you would lose (1.00) from holding Aim Investment Securities or give up 0.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ab All Market  vs.  Aim Investment Securities

Ab All Market

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab All Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ab All is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aim Investment Securities

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aim Investment Securities are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aim Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab All and Aim Investment

The main advantage of trading using opposite Ab All and Aim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab All position performs unexpectedly, Aim Investment 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 Aim Investment will offset losses from the drop in Aim Investment's long position.

The idea behind Ab All Market and Aim Investment Securities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.