Correlation Between Aimia and Arrowmark Financial
Can any of the company-specific risk be diversified away by investing in both Aimia and Arrowmark Financial 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 Aimia and Arrowmark Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aimia Inc and Arrowmark Financial Corp, you can compare the effects of market volatilities on Aimia and Arrowmark Financial 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 Aimia with a short position of Arrowmark Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimia and Arrowmark Financial.
Diversification Opportunities for Aimia and Arrowmark Financial
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aimia and Arrowmark is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aimia Inc and Arrowmark Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrowmark Financial Corp and Aimia 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 Aimia Inc are associated (or correlated) with Arrowmark Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrowmark Financial Corp has no effect on the direction of Aimia i.e., Aimia and Arrowmark Financial go up and down completely randomly.
Pair Corralation between Aimia and Arrowmark Financial
Assuming the 90 days horizon Aimia Inc is expected to under-perform the Arrowmark Financial. In addition to that, Aimia is 2.31 times more volatile than Arrowmark Financial Corp. It trades about -0.04 of its total potential returns per unit of risk. Arrowmark Financial Corp is currently generating about 0.13 per unit of volatility. If you would invest 1,687 in Arrowmark Financial Corp on November 28, 2024 and sell it today you would earn a total of 406.00 from holding Arrowmark Financial Corp or generate 24.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aimia Inc vs. Arrowmark Financial Corp
Performance |
| Timeline |
| Aimia Inc |
| Arrowmark Financial Corp |
Aimia and Arrowmark Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aimia and Arrowmark Financial
The main advantage of trading using opposite Aimia and Arrowmark Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aimia position performs unexpectedly, Arrowmark Financial 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 Arrowmark Financial will offset losses from the drop in Arrowmark Financial's long position.| Aimia vs. Flow Capital Corp | Aimia vs. Ameritrans Capital Corp | Aimia vs. Blackhawk Growth Corp | Aimia vs. Azimut Holding SpA |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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