Correlation Between AIM Industrial and Amata Summit
Can any of the company-specific risk be diversified away by investing in both AIM Industrial and Amata Summit 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 Industrial and Amata Summit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIM Industrial Growth and Amata Summit Growth, you can compare the effects of market volatilities on AIM Industrial and Amata Summit 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 Industrial with a short position of Amata Summit. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM Industrial and Amata Summit.
Diversification Opportunities for AIM Industrial and Amata Summit
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AIM and Amata is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding AIM Industrial Growth and Amata Summit Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amata Summit Growth and AIM Industrial 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 Industrial Growth are associated (or correlated) with Amata Summit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amata Summit Growth has no effect on the direction of AIM Industrial i.e., AIM Industrial and Amata Summit go up and down completely randomly.
Pair Corralation between AIM Industrial and Amata Summit
Assuming the 90 days trading horizon AIM Industrial Growth is expected to generate 0.71 times more return on investment than Amata Summit. However, AIM Industrial Growth is 1.41 times less risky than Amata Summit. It trades about -0.07 of its potential returns per unit of risk. Amata Summit Growth is currently generating about -0.11 per unit of risk. If you would invest 1,050 in AIM Industrial Growth on November 2, 2024 and sell it today you would lose (10.00) from holding AIM Industrial Growth or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
AIM Industrial Growth vs. Amata Summit Growth
Performance |
| Timeline |
| AIM Industrial Growth |
| Amata Summit Growth |
AIM Industrial and Amata Summit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM Industrial and Amata Summit
The main advantage of trading using opposite AIM Industrial and Amata Summit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM Industrial position performs unexpectedly, Amata Summit 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 Amata Summit will offset losses from the drop in Amata Summit's long position.| AIM Industrial vs. Amata Summit Growth | AIM Industrial vs. WHA Premium Growth | AIM Industrial vs. Digital Telecommunications Infrastructure | AIM Industrial vs. Quality Houses Property |
| Amata Summit vs. WHA Premium Growth | Amata Summit vs. AIM Industrial Growth | Amata Summit vs. Quality Houses Property |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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