Correlation Between Aam Select and Aam/himco Short
Can any of the company-specific risk be diversified away by investing in both Aam Select and Aam/himco Short 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 Aam Select and Aam/himco Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aam Select Income and Aamhimco Short Duration, you can compare the effects of market volatilities on Aam Select and Aam/himco Short 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 Aam Select with a short position of Aam/himco Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam Select and Aam/himco Short.
Diversification Opportunities for Aam Select and Aam/himco Short
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aam and Aam/himco is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aam Select Income and Aamhimco Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aamhimco Short Duration and Aam Select 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 Aam Select Income are associated (or correlated) with Aam/himco Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aamhimco Short Duration has no effect on the direction of Aam Select i.e., Aam Select and Aam/himco Short go up and down completely randomly.
Pair Corralation between Aam Select and Aam/himco Short
Assuming the 90 days horizon Aam Select is expected to generate 44.6 times less return on investment than Aam/himco Short. In addition to that, Aam Select is 3.4 times more volatile than Aamhimco Short Duration. It trades about 0.0 of its total potential returns per unit of risk. Aamhimco Short Duration is currently generating about 0.24 per unit of volatility. If you would invest 998.00 in Aamhimco Short Duration on October 26, 2024 and sell it today you would earn a total of 4.00 from holding Aamhimco Short Duration or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aam Select Income vs. Aamhimco Short Duration
Performance |
| Timeline |
| Aam Select Income |
| Aamhimco Short Duration |
Aam Select and Aam/himco Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam Select and Aam/himco Short
The main advantage of trading using opposite Aam Select and Aam/himco Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam Select position performs unexpectedly, Aam/himco Short 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 Aam/himco Short will offset losses from the drop in Aam/himco Short's long position.| Aam Select vs. Siit High Yield | Aam Select vs. Pace High Yield | Aam Select vs. City National Rochdale | Aam Select vs. Fidelity Capital Income |
| Aam/himco Short vs. Aamhimco Short Duration | Aam/himco Short vs. Aambahl Gaynor Income | Aam/himco Short vs. Aam Select Income | Aam/himco Short vs. Aam Select Income |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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