Correlation Between AIM ETF and ALPS

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

By analyzing existing cross correlation between AIM ETF Products and ALPS, you can compare the effects of market volatilities on AIM ETF and ALPS 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 ETF with a short position of ALPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and ALPS.

Diversification Opportunities for AIM ETF and ALPS

0.87

Correlation Coefficient

AIM ETF  ALPS

Very poor diversification

The 3 months correlation between AIM and ALPS is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and ALPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALPS and AIM ETF 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 ETF Products are associated (or correlated) with ALPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALPS has no effect on the direction of AIM ETF i.e., AIM ETF and ALPS go up and down completely randomly.

Pair Corralation between AIM ETF and ALPS

If you would invest  2,602  in AIM ETF Products on September 15, 2024 and sell it today you would earn a total of  87.00  from holding AIM ETF Products or generate 3.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	0.0%
Values	Daily Returns

AIM ETF Products  vs.  ALPS

AIM ETF Products

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AIM ETF Products are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, AIM ETF is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

ALPS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALPS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, ALPS is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with AIM ETF and ALPS

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

The idea behind AIM ETF Products and ALPS 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.