Correlation Between Empire State and AIM ETF
Can any of the company-specific risk be diversified away by investing in both Empire State and AIM ETF 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 Empire State and AIM ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and AIM ETF Products, you can compare the effects of market volatilities on Empire State and AIM ETF 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 Empire State with a short position of AIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and AIM ETF.
Diversification Opportunities for Empire State and AIM ETF
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and AIM is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and AIM ETF Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM ETF Products and Empire State 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 Empire State Realty are associated (or correlated) with AIM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIM ETF Products has no effect on the direction of Empire State i.e., Empire State and AIM ETF go up and down completely randomly.
Pair Corralation between Empire State and AIM ETF
Given the investment horizon of 90 days Empire State is expected to generate 1.24 times less return on investment than AIM ETF. In addition to that, Empire State is 4.8 times more volatile than AIM ETF Products. It trades about 0.04 of its total potential returns per unit of risk. AIM ETF Products is currently generating about 0.21 per unit of volatility. If you would invest 3,297 in AIM ETF Products on August 29, 2024 and sell it today you would earn a total of 74.00 from holding AIM ETF Products or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire State Realty vs. AIM ETF Products
Performance |
| Timeline |
| Empire State Realty |
| AIM ETF Products |
Empire State and AIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and AIM ETF
The main advantage of trading using opposite Empire State and AIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, AIM ETF 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 ETF will offset losses from the drop in AIM ETF's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| AIM ETF vs. AIM ETF Products | AIM ETF vs. AIM ETF Products | AIM ETF vs. AIM ETF Products | AIM ETF vs. AllianzIM Large Cap |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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