Correlation Between Aim International and Pace Smallmedium
Can any of the company-specific risk be diversified away by investing in both Aim International and Pace Smallmedium 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 International and Pace Smallmedium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aim International Mutual and Pace Smallmedium Value, you can compare the effects of market volatilities on Aim International and Pace Smallmedium 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 International with a short position of Pace Smallmedium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aim International and Pace Smallmedium.
Diversification Opportunities for Aim International and Pace Smallmedium
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aim and Pace is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aim International Mutual and Pace Smallmedium Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Smallmedium Value and Aim International 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 International Mutual are associated (or correlated) with Pace Smallmedium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Smallmedium Value has no effect on the direction of Aim International i.e., Aim International and Pace Smallmedium go up and down completely randomly.
Pair Corralation between Aim International and Pace Smallmedium
Assuming the 90 days horizon Aim International Mutual is expected to generate 0.77 times more return on investment than Pace Smallmedium. However, Aim International Mutual is 1.3 times less risky than Pace Smallmedium. It trades about 0.11 of its potential returns per unit of risk. Pace Smallmedium Value is currently generating about 0.05 per unit of risk. If you would invest 1,973 in Aim International Mutual on September 14, 2024 and sell it today you would earn a total of 273.00 from holding Aim International Mutual or generate 13.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 29.15% |
| Values | Daily Returns |
Aim International Mutual vs. Pace Smallmedium Value
Performance |
| Timeline |
| Aim International Mutual |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Pace Smallmedium Value |
Aim International and Pace Smallmedium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aim International and Pace Smallmedium
The main advantage of trading using opposite Aim International and Pace Smallmedium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aim International position performs unexpectedly, Pace Smallmedium 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 Pace Smallmedium will offset losses from the drop in Pace Smallmedium's long position.| Aim International vs. Pace Smallmedium Value | Aim International vs. William Blair Small | Aim International vs. Mutual Of America | Aim International vs. Ab Small Cap |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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