Correlation Between AIM ETF and Goldman Sachs

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

Diversification Opportunities for AIM ETF and Goldman Sachs

0.92

Correlation Coefficient

AIM ETF  Goldman Sachs

Almost no diversification

The 3 months correlation between AIM and Goldman is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and Goldman Sachs SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs SP 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs SP has no effect on the direction of AIM ETF i.e., AIM ETF and Goldman Sachs go up and down completely randomly.

Pair Corralation between AIM ETF and Goldman Sachs

Given the investment horizon of 90 days AIM ETF Products is expected to generate 0.09 times more return on investment than Goldman Sachs. However, AIM ETF Products is 11.73 times less risky than Goldman Sachs. It trades about 0.3 of its potential returns per unit of risk. Goldman Sachs SP is currently generating about -0.11 per unit of risk. If you would invest  3,349  in AIM ETF Products on October 4, 2024 and sell it today you would earn a total of  14.00  from holding AIM ETF Products or generate 0.42% 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.  Goldman Sachs SP

AIM ETF Products

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AIM ETF Products are ranked lower than 20 (%) 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.

Goldman Sachs SP

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs SP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward indicators, Goldman Sachs is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AIM ETF and Goldman Sachs

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

The idea behind AIM ETF Products and Goldman Sachs SP 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.