Correlation Between AIM ETF and AllianzIM Large

Can any of the company-specific risk be diversified away by investing in both AIM ETF and AllianzIM Large 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 AllianzIM Large 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 AllianzIM Large Cap, you can compare the effects of market volatilities on AIM ETF and AllianzIM Large 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 AllianzIM Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and AllianzIM Large.

Diversification Opportunities for AIM ETF and AllianzIM Large

0.9

Correlation Coefficient

AIM ETF  AllianzIM Large

Almost no diversification

The 3 months correlation between AIM and AllianzIM is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and AllianzIM Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AllianzIM Large Cap 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 AllianzIM Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AllianzIM Large Cap has no effect on the direction of AIM ETF i.e., AIM ETF and AllianzIM Large go up and down completely randomly.

Pair Corralation between AIM ETF and AllianzIM Large

Given the investment horizon of 90 days AIM ETF is expected to generate 1.42 times less return on investment than AllianzIM Large. But when comparing it to its historical volatility, AIM ETF Products is 1.73 times less risky than AllianzIM Large. It trades about 0.15 of its potential returns per unit of risk. AllianzIM Large Cap is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,826  in AllianzIM Large Cap on October 7, 2024 and sell it today you would earn a total of  1,065  from holding AllianzIM Large Cap or generate 37.69% return on investment over 90 days.

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

AIM ETF Products  vs.  AllianzIM Large Cap

AIM ETF Products

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AIM ETF Products are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, AIM ETF is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

AllianzIM Large Cap

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AllianzIM Large Cap are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AllianzIM Large is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AIM ETF and AllianzIM Large

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

The idea behind AIM ETF Products and AllianzIM Large Cap 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.