Correlation Between Financials Ultrasector and Aim International
Can any of the company-specific risk be diversified away by investing in both Financials Ultrasector and Aim International 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 Financials Ultrasector and Aim International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financials Ultrasector Profund and Aim International Mutual, you can compare the effects of market volatilities on Financials Ultrasector and Aim International 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 Financials Ultrasector with a short position of Aim International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financials Ultrasector and Aim International.
Diversification Opportunities for Financials Ultrasector and Aim International
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Financials and Aim is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Financials Ultrasector Profund and Aim International Mutual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim International Mutual and Financials Ultrasector 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 Financials Ultrasector Profund are associated (or correlated) with Aim International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim International Mutual has no effect on the direction of Financials Ultrasector i.e., Financials Ultrasector and Aim International go up and down completely randomly.
Pair Corralation between Financials Ultrasector and Aim International
If you would invest 3,984 in Financials Ultrasector Profund on September 3, 2024 and sell it today you would earn a total of 646.00 from holding Financials Ultrasector Profund or generate 16.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Financials Ultrasector Profund vs. Aim International Mutual
Performance |
| Timeline |
| Financials Ultrasector |
| Aim International Mutual |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Financials Ultrasector and Aim International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financials Ultrasector and Aim International
The main advantage of trading using opposite Financials Ultrasector and Aim International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financials Ultrasector position performs unexpectedly, Aim International 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 International will offset losses from the drop in Aim International's long position.| Financials Ultrasector vs. American Century Etf | Financials Ultrasector vs. Boston Partners Small | Financials Ultrasector vs. Heartland Value Plus | Financials Ultrasector vs. Royce Opportunity Fund |
| Aim International vs. Prudential Jennison Financial | Aim International vs. Davis Financial Fund | Aim International vs. 1919 Financial Services | Aim International vs. Angel Oak Financial |
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 Stocks Directory module to find actively traded stocks across global markets.
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