Correlation Between Aim Investment and Invesco Balanced-risk
Can any of the company-specific risk be diversified away by investing in both Aim Investment and Invesco Balanced-risk 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 Invesco Balanced-risk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aim Investment Funds and Invesco Balanced Risk Allocation, you can compare the effects of market volatilities on Aim Investment and Invesco Balanced-risk 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 Invesco Balanced-risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aim Investment and Invesco Balanced-risk.
Diversification Opportunities for Aim Investment and Invesco Balanced-risk
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aim and Invesco is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Aim Investment Funds and Invesco Balanced Risk Allocati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Balanced Risk 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 Funds are associated (or correlated) with Invesco Balanced-risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Balanced Risk has no effect on the direction of Aim Investment i.e., Aim Investment and Invesco Balanced-risk go up and down completely randomly.
Pair Corralation between Aim Investment and Invesco Balanced-risk
Assuming the 90 days horizon Aim Investment Funds is expected to generate 0.7 times more return on investment than Invesco Balanced-risk. However, Aim Investment Funds is 1.44 times less risky than Invesco Balanced-risk. It trades about -0.02 of its potential returns per unit of risk. Invesco Balanced Risk Allocation is currently generating about -0.04 per unit of risk. If you would invest 437.00 in Aim Investment Funds on August 25, 2024 and sell it today you would lose (3.00) from holding Aim Investment Funds or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aim Investment Funds vs. Invesco Balanced Risk Allocati
Performance |
| Timeline |
| Aim Investment Funds |
| Invesco Balanced Risk |
Aim Investment and Invesco Balanced-risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aim Investment and Invesco Balanced-risk
The main advantage of trading using opposite Aim Investment and Invesco Balanced-risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aim Investment position performs unexpectedly, Invesco Balanced-risk 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 Invesco Balanced-risk will offset losses from the drop in Invesco Balanced-risk's long position.| Aim Investment vs. Inverse Government Long | Aim Investment vs. Aig Government Money | Aim Investment vs. Lord Abbett Government | Aim Investment vs. Fidelity Series Government |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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