Correlation Between Fixed Income and Aam Select
Can any of the company-specific risk be diversified away by investing in both Fixed Income and Aam Select 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 Fixed Income and Aam Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fixed Income Shares and Aam Select Income, you can compare the effects of market volatilities on Fixed Income and Aam Select 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 Fixed Income with a short position of Aam Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fixed Income and Aam Select.
Diversification Opportunities for Fixed Income and Aam Select
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fixed and Aam is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fixed Income Shares and Aam Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aam Select Income and Fixed Income 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 Fixed Income Shares are associated (or correlated) with Aam Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aam Select Income has no effect on the direction of Fixed Income i.e., Fixed Income and Aam Select go up and down completely randomly.
Pair Corralation between Fixed Income and Aam Select
Assuming the 90 days horizon Fixed Income Shares is expected to generate 1.03 times more return on investment than Aam Select. However, Fixed Income is 1.03 times more volatile than Aam Select Income. It trades about 0.21 of its potential returns per unit of risk. Aam Select Income is currently generating about 0.12 per unit of risk. If you would invest 892.00 in Fixed Income Shares on September 14, 2024 and sell it today you would earn a total of 12.00 from holding Fixed Income Shares or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fixed Income Shares vs. Aam Select Income
Performance |
| Timeline |
| Fixed Income Shares |
| Aam Select Income |
Fixed Income and Aam Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fixed Income and Aam Select
The main advantage of trading using opposite Fixed Income and Aam Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fixed Income position performs unexpectedly, Aam Select 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 Select will offset losses from the drop in Aam Select's long position.| Fixed Income vs. Aam Select Income | Fixed Income vs. Fa 529 Aggressive | Fixed Income vs. Arrow Managed Futures | Fixed Income vs. Leggmason Partners Institutional |
| Aam Select vs. Mid Cap Growth | Aam Select vs. Vy Baron Growth | Aam Select vs. Qs Defensive Growth | Aam Select vs. Vy Baron Growth |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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