Correlation Between Flexible Solutions and Aimfinity Investment
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions and Aimfinity 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 Flexible Solutions and Aimfinity Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Solutions International and Aimfinity Investment I, you can compare the effects of market volatilities on Flexible Solutions and Aimfinity 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 Flexible Solutions with a short position of Aimfinity Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and Aimfinity Investment.
Diversification Opportunities for Flexible Solutions and Aimfinity Investment
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flexible and Aimfinity is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Aimfinity Investment I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimfinity Investment and Flexible Solutions 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 Flexible Solutions International are associated (or correlated) with Aimfinity Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimfinity Investment has no effect on the direction of Flexible Solutions i.e., Flexible Solutions and Aimfinity Investment go up and down completely randomly.
Pair Corralation between Flexible Solutions and Aimfinity Investment
Considering the 90-day investment horizon Flexible Solutions International is expected to under-perform the Aimfinity Investment. In addition to that, Flexible Solutions is 1.39 times more volatile than Aimfinity Investment I. It trades about -0.03 of its total potential returns per unit of risk. Aimfinity Investment I is currently generating about 0.02 per unit of volatility. If you would invest 1,201 in Aimfinity Investment I on November 29, 2024 and sell it today you would earn a total of 3.00 from holding Aimfinity Investment I or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexible Solutions Internation vs. Aimfinity Investment I
Performance |
| Timeline |
| Flexible Solutions |
| Aimfinity Investment |
Flexible Solutions and Aimfinity Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and Aimfinity Investment
The main advantage of trading using opposite Flexible Solutions and Aimfinity Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions position performs unexpectedly, Aimfinity 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 Aimfinity Investment will offset losses from the drop in Aimfinity Investment's long position.| Flexible Solutions vs. Orion Engineered Carbons | Flexible Solutions vs. International Flavors Fragrances | Flexible Solutions vs. Sociedad Quimica y | Flexible Solutions vs. Albemarle Corp |
| Aimfinity Investment vs. Chipotle Mexican Grill | Aimfinity Investment vs. Luxfer Holdings PLC | Aimfinity Investment vs. Eastman Chemical | Aimfinity Investment vs. Dennys Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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