Correlation Between Alpine High and Aim Investment
Can any of the company-specific risk be diversified away by investing in both Alpine High and Aim Investment 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 Alpine High and Aim Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpine High Yield and Aim Investment Funds, you can compare the effects of market volatilities on Alpine High and Aim Investment 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 Alpine High with a short position of Aim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpine High and Aim Investment.
Diversification Opportunities for Alpine High and Aim Investment
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alpine and Aim is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Alpine High Yield and Aim Investment Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Investment Funds and Alpine High 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 Alpine High Yield are associated (or correlated) with Aim Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim Investment Funds has no effect on the direction of Alpine High i.e., Alpine High and Aim Investment go up and down completely randomly.
Pair Corralation between Alpine High and Aim Investment
Assuming the 90 days horizon Alpine High is expected to generate 1.8 times less return on investment than Aim Investment. But when comparing it to its historical volatility, Alpine High Yield is 2.09 times less risky than Aim Investment. It trades about 0.17 of its potential returns per unit of risk. Aim Investment Funds is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 429.00 in Aim Investment Funds on September 3, 2024 and sell it today you would earn a total of 5.00 from holding Aim Investment Funds or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpine High Yield vs. Aim Investment Funds
Performance |
| Timeline |
| Alpine High Yield |
| Aim Investment Funds |
Alpine High and Aim Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpine High and Aim Investment
The main advantage of trading using opposite Alpine High and Aim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpine High position performs unexpectedly, Aim Investment 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 Aim Investment will offset losses from the drop in Aim Investment's long position.| Alpine High vs. Touchstone Large Cap | Alpine High vs. Avantis Large Cap | Alpine High vs. Pace Large Value | Alpine High vs. Transamerica Large Cap |
| Aim Investment vs. Rbc Emerging Markets | Aim Investment vs. Legg Mason Partners | Aim Investment vs. Dodge Cox Emerging | Aim Investment vs. Black Oak Emerging |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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