Correlation Between Aim Investment and Chestnut Street
Can any of the company-specific risk be diversified away by investing in both Aim Investment and Chestnut Street 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 Chestnut Street 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 Chestnut Street Exchange, you can compare the effects of market volatilities on Aim Investment and Chestnut Street 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 Chestnut Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aim Investment and Chestnut Street.
Diversification Opportunities for Aim Investment and Chestnut Street
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aim and Chestnut is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aim Investment Secs and Chestnut Street Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chestnut Street Exchange 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 Chestnut Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chestnut Street Exchange has no effect on the direction of Aim Investment i.e., Aim Investment and Chestnut Street go up and down completely randomly.
Pair Corralation between Aim Investment and Chestnut Street
If you would invest 113,531 in Chestnut Street Exchange on August 28, 2024 and sell it today you would earn a total of 3,968 from holding Chestnut Street Exchange or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aim Investment Secs vs. Chestnut Street Exchange
Performance |
| Timeline |
| Aim Investment Secs |
| Chestnut Street Exchange |
Aim Investment and Chestnut Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aim Investment and Chestnut Street
The main advantage of trading using opposite Aim Investment and Chestnut Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aim Investment position performs unexpectedly, Chestnut Street 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 Chestnut Street will offset losses from the drop in Chestnut Street's long position.| Aim Investment vs. Vanguard Short Term Government | Aim Investment vs. Inverse Government Long | Aim Investment vs. Fidelity Series Government | Aim Investment vs. Ab Government Exchange |
| Chestnut Street vs. Vanguard Total Stock | Chestnut Street vs. Vanguard 500 Index | Chestnut Street vs. Vanguard Total Stock | Chestnut Street vs. Vanguard Total Stock |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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