Correlation Between Chestnut Street and Aim Investment
Can any of the company-specific risk be diversified away by investing in both Chestnut Street 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 Chestnut Street and Aim Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chestnut Street Exchange and Aim Investment Secs, you can compare the effects of market volatilities on Chestnut Street 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 Chestnut Street with a short position of Aim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chestnut Street and Aim Investment.
Diversification Opportunities for Chestnut Street and Aim Investment
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chestnut and Aim is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Chestnut Street Exchange and Aim Investment Secs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Investment Secs and Chestnut Street 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 Chestnut Street Exchange 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 Secs has no effect on the direction of Chestnut Street i.e., Chestnut Street and Aim Investment go up and down completely randomly.
Pair Corralation between Chestnut Street and Aim Investment
If you would invest 113,531 in Chestnut Street Exchange on August 28, 2024 and sell it today you would earn a total of 3,968 from holding Chestnut Street Exchange or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chestnut Street Exchange vs. Aim Investment Secs
Performance |
| Timeline |
| Chestnut Street Exchange |
| Aim Investment Secs |
Chestnut Street and Aim Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chestnut Street and Aim Investment
The main advantage of trading using opposite Chestnut Street and Aim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chestnut Street 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.| Chestnut Street vs. Vanguard Total Stock | Chestnut Street vs. Vanguard 500 Index | Chestnut Street vs. Vanguard Total Stock | Chestnut Street vs. Vanguard Total Stock |
| Aim Investment vs. Vanguard Short Term Government | Aim Investment vs. Inverse Government Long | Aim Investment vs. Fidelity Series Government | Aim Investment vs. Ab Government Exchange |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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