Correlation Between Aim Taxexempt and New York

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

By analyzing existing cross correlation between Aim Taxexempt Funds and New York Municipal, you can compare the effects of market volatilities on Aim Taxexempt and New York 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 Aim Taxexempt with a short position of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aim Taxexempt and New York.

Diversification Opportunities for Aim Taxexempt and New York

0.8

Correlation Coefficient

Aim Taxexempt  New York

Very poor diversification

The 3 months correlation between Aim and New is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aim Taxexempt Funds and New York Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Municipal and Aim Taxexempt 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 Aim Taxexempt Funds are associated (or correlated) with New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Municipal has no effect on the direction of Aim Taxexempt i.e., Aim Taxexempt and New York go up and down completely randomly.

Pair Corralation between Aim Taxexempt and New York

Assuming the 90 days horizon Aim Taxexempt Funds is expected to generate 1.28 times more return on investment than New York. However, Aim Taxexempt is 1.28 times more volatile than New York Municipal. It trades about 0.06 of its potential returns per unit of risk. New York Municipal is currently generating about 0.04 per unit of risk. If you would invest  281.00  in Aim Taxexempt Funds on September 12, 2024 and sell it today you would earn a total of  2.00  from holding Aim Taxexempt Funds or generate 0.71% return on investment over 90 days.

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

Aim Taxexempt Funds  vs.  New York Municipal

Aim Taxexempt Funds

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aim Taxexempt Funds are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Aim Taxexempt is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

New York Municipal

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in New York Municipal are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, New York is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aim Taxexempt and New York

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

The idea behind Aim Taxexempt Funds and New York Municipal 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.