Correlation Between AIM ETF and Bondbloxx ETF

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

Diversification Opportunities for AIM ETF and Bondbloxx ETF

0.95

Correlation Coefficient

AIM ETF  Bondbloxx ETF

Almost no diversification

The 3 months correlation between AIM and Bondbloxx is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and Bondbloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bondbloxx ETF Trust 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 Bondbloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bondbloxx ETF Trust has no effect on the direction of AIM ETF i.e., AIM ETF and Bondbloxx ETF go up and down completely randomly.

Pair Corralation between AIM ETF and Bondbloxx ETF

Given the investment horizon of 90 days AIM ETF Products is expected to generate 8.97 times more return on investment than Bondbloxx ETF. However, AIM ETF is 8.97 times more volatile than Bondbloxx ETF Trust. It trades about 0.25 of its potential returns per unit of risk. Bondbloxx ETF Trust is currently generating about 0.6 per unit of risk. If you would invest  2,577  in AIM ETF Products on September 2, 2024 and sell it today you would earn a total of  108.00  from holding AIM ETF Products or generate 4.19% 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.  Bondbloxx ETF Trust

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 rather sound basic indicators, AIM ETF is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Bondbloxx ETF Trust

Risk-Adjusted Performance

46 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Bondbloxx ETF Trust are ranked lower than 46 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Bondbloxx ETF is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AIM ETF and Bondbloxx ETF

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

The idea behind AIM ETF Products and Bondbloxx ETF Trust 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.