Correlation Between Aam Select and Midcap Growth
Can any of the company-specific risk be diversified away by investing in both Aam Select and Midcap Growth 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 Midcap Growth 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 The Midcap Growth, you can compare the effects of market volatilities on Aam Select and Midcap Growth 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 Midcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam Select and Midcap Growth.
Diversification Opportunities for Aam Select and Midcap Growth
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aam and Midcap is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aam Select Income and The Midcap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Growth 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 Midcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Growth has no effect on the direction of Aam Select i.e., Aam Select and Midcap Growth go up and down completely randomly.
Pair Corralation between Aam Select and Midcap Growth
Assuming the 90 days horizon Aam Select Income is expected to generate 0.34 times more return on investment than Midcap Growth. However, Aam Select Income is 2.98 times less risky than Midcap Growth. It trades about 0.1 of its potential returns per unit of risk. The Midcap Growth is currently generating about 0.03 per unit of risk. If you would invest 843.00 in Aam Select Income on September 14, 2024 and sell it today you would earn a total of 83.00 from holding Aam Select Income or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aam Select Income vs. The Midcap Growth
Performance |
| Timeline |
| Aam Select Income |
| Midcap Growth |
Aam Select and Midcap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam Select and Midcap Growth
The main advantage of trading using opposite Aam Select and Midcap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam Select position performs unexpectedly, Midcap Growth 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 Midcap Growth will offset losses from the drop in Midcap Growth's long position.| Aam Select vs. Mid Cap Growth | Aam Select vs. Vy Baron Growth | Aam Select vs. Qs Defensive Growth | Aam Select vs. Vy Baron Growth |
| Midcap Growth vs. T Rowe Price | Midcap Growth vs. Aam Select Income | Midcap Growth vs. Rbc Microcap Value | Midcap Growth vs. Western Asset Municipal |
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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