Correlation Between Aim Investment and American Funds
Can any of the company-specific risk be diversified away by investing in both Aim Investment and American Funds 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 Aim Investment and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aim Investment Secs and American Funds 2020, you can compare the effects of market volatilities on Aim Investment and American Funds 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 Aim Investment with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aim Investment and American Funds.
Diversification Opportunities for Aim Investment and American Funds
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aim and American is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Aim Investment Secs and American Funds 2020 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2020 and Aim Investment 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 Aim Investment Secs are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2020 has no effect on the direction of Aim Investment i.e., Aim Investment and American Funds go up and down completely randomly.
Pair Corralation between Aim Investment and American Funds
If you would invest 100.00 in Aim Investment Secs on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Aim Investment Secs or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aim Investment Secs vs. American Funds 2020
Performance |
| Timeline |
| Aim Investment Secs |
| American Funds 2020 |
Aim Investment and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aim Investment and American Funds
The main advantage of trading using opposite Aim Investment and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aim Investment position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Aim Investment vs. Vanguard Total Stock | Aim Investment vs. Vanguard 500 Index | Aim Investment vs. Vanguard Total Stock | Aim Investment vs. Vanguard Total Stock |
| American Funds vs. Rbc Funds Trust | American Funds vs. Ashmore Emerging Markets | American Funds vs. Transamerica Funds | American Funds vs. Aim Investment Secs |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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