Correlation Between Ally Leasehold and AIM Commercial
Can any of the company-specific risk be diversified away by investing in both Ally Leasehold and AIM Commercial 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 Ally Leasehold and AIM Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ally Leasehold Real and AIM Commercial Growth, you can compare the effects of market volatilities on Ally Leasehold and AIM Commercial 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 Ally Leasehold with a short position of AIM Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ally Leasehold and AIM Commercial.
Diversification Opportunities for Ally Leasehold and AIM Commercial
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ally and AIM is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ally Leasehold Real and AIM Commercial Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM Commercial Growth and Ally Leasehold 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 Ally Leasehold Real are associated (or correlated) with AIM Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIM Commercial Growth has no effect on the direction of Ally Leasehold i.e., Ally Leasehold and AIM Commercial go up and down completely randomly.
Pair Corralation between Ally Leasehold and AIM Commercial
Assuming the 90 days trading horizon Ally Leasehold Real is expected to generate 1.05 times more return on investment than AIM Commercial. However, Ally Leasehold is 1.05 times more volatile than AIM Commercial Growth. It trades about -0.01 of its potential returns per unit of risk. AIM Commercial Growth is currently generating about -0.05 per unit of risk. If you would invest 591.00 in Ally Leasehold Real on September 3, 2024 and sell it today you would lose (66.00) from holding Ally Leasehold Real or give up 11.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ally Leasehold Real vs. AIM Commercial Growth
Performance |
| Timeline |
| Ally Leasehold Real |
| AIM Commercial Growth |
Ally Leasehold and AIM Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ally Leasehold and AIM Commercial
The main advantage of trading using opposite Ally Leasehold and AIM Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ally Leasehold position performs unexpectedly, AIM Commercial 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 Commercial will offset losses from the drop in AIM Commercial's long position.| Ally Leasehold vs. AIM Commercial Growth | Ally Leasehold vs. AIM Industrial Growth | Ally Leasehold vs. Dusit Thani Freehold | Ally Leasehold vs. CPN Retail Growth |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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