Correlation Between AIM ETF and 02005NBJ8

Can any of the company-specific risk be diversified away by investing in both AIM ETF and 02005NBJ8 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 02005NBJ8 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 ALLY FINANCIAL INC, you can compare the effects of market volatilities on AIM ETF and 02005NBJ8 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 02005NBJ8. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and 02005NBJ8.

Diversification Opportunities for AIM ETF and 02005NBJ8

-0.4

Correlation Coefficient

AIM ETF  02005NBJ8

Very good diversification

The 3 months correlation between AIM and 02005NBJ8 is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and ALLY FINANCIAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLY FINANCIAL INC 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 02005NBJ8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLY FINANCIAL INC has no effect on the direction of AIM ETF i.e., AIM ETF and 02005NBJ8 go up and down completely randomly.

Pair Corralation between AIM ETF and 02005NBJ8

Given the investment horizon of 90 days AIM ETF Products is expected to generate 0.27 times more return on investment than 02005NBJ8. However, AIM ETF Products is 3.73 times less risky than 02005NBJ8. It trades about 0.21 of its potential returns per unit of risk. ALLY FINANCIAL INC is currently generating about -0.13 per unit of risk. If you would invest  3,342  in AIM ETF Products on September 23, 2024 and sell it today you would earn a total of  9.00  from holding AIM ETF Products or generate 0.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

AIM ETF Products  vs.  ALLY FINANCIAL INC

AIM ETF Products

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AIM ETF Products are ranked lower than 16 (%) 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 recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

ALLY FINANCIAL INC

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ALLY FINANCIAL INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 02005NBJ8 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 ETF and 02005NBJ8

The main advantage of trading using opposite AIM ETF and 02005NBJ8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF position performs unexpectedly, 02005NBJ8 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 02005NBJ8 will offset losses from the drop in 02005NBJ8's long position.

The idea behind AIM ETF Products and ALLY FINANCIAL INC 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..