Correlation Between Aim Investment and Thornburg Limited
Can any of the company-specific risk be diversified away by investing in both Aim Investment and Thornburg Limited 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 Thornburg Limited 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 Thornburg Limited Term, you can compare the effects of market volatilities on Aim Investment and Thornburg Limited 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 Thornburg Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aim Investment and Thornburg Limited.
Diversification Opportunities for Aim Investment and Thornburg Limited
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aim and Thornburg is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aim Investment Secs and Thornburg Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Limited Term 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 Thornburg Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Limited Term has no effect on the direction of Aim Investment i.e., Aim Investment and Thornburg Limited go up and down completely randomly.
Pair Corralation between Aim Investment and Thornburg Limited
Assuming the 90 days horizon Aim Investment Secs is expected to generate 0.44 times more return on investment than Thornburg Limited. However, Aim Investment Secs is 2.25 times less risky than Thornburg Limited. It trades about 0.12 of its potential returns per unit of risk. Thornburg Limited Term is currently generating about 0.04 per unit of risk. If you would invest 93.00 in Aim Investment Secs on August 26, 2024 and sell it today you would earn a total of 7.00 from holding Aim Investment Secs or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aim Investment Secs vs. Thornburg Limited Term
Performance |
| Timeline |
| Aim Investment Secs |
| Thornburg Limited Term |
Aim Investment and Thornburg Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aim Investment and Thornburg Limited
The main advantage of trading using opposite Aim Investment and Thornburg Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aim Investment position performs unexpectedly, Thornburg Limited 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 Thornburg Limited will offset losses from the drop in Thornburg Limited's 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 |
| Thornburg Limited vs. Plan Investment | Thornburg Limited vs. Pioneer Money Market | Thornburg Limited vs. Aim Investment Secs | Thornburg Limited vs. Franklin Government Money |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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