Correlation Between AIM ETF and Saba Capital
Can any of the company-specific risk be diversified away by investing in both AIM ETF and Saba Capital 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 Saba Capital 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 Saba Capital Income, you can compare the effects of market volatilities on AIM ETF and Saba Capital 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 Saba Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and Saba Capital.
Diversification Opportunities for AIM ETF and Saba Capital
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AIM and Saba is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and Saba Capital Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saba Capital Income 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 Saba Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saba Capital Income has no effect on the direction of AIM ETF i.e., AIM ETF and Saba Capital go up and down completely randomly.
Pair Corralation between AIM ETF and Saba Capital
Given the investment horizon of 90 days AIM ETF is expected to generate 8.28 times less return on investment than Saba Capital. But when comparing it to its historical volatility, AIM ETF Products is 16.82 times less risky than Saba Capital. It trades about 0.27 of its potential returns per unit of risk. Saba Capital Income is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 864.00 in Saba Capital Income on September 22, 2024 and sell it today you would earn a total of 25.00 from holding Saba Capital Income or generate 2.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
AIM ETF Products vs. Saba Capital Income
Performance |
Timeline |
AIM ETF Products |
Saba Capital Income |
AIM ETF and Saba Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AIM ETF and Saba Capital
The main advantage of trading using opposite AIM ETF and Saba Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF position performs unexpectedly, Saba Capital 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 Saba Capital will offset losses from the drop in Saba Capital's long position.AIM ETF vs. First Trust Exchange Traded | AIM ETF vs. First Trust Exchange Traded | AIM ETF vs. FT Cboe Vest | AIM ETF vs. FT Cboe Vest |
Saba Capital vs. Vanguard Total Stock | Saba Capital vs. SPDR SP 500 | Saba Capital vs. iShares Core SP | Saba Capital vs. Vanguard Total Bond |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |