Correlation Between Aim International and Prudential Real
Can any of the company-specific risk be diversified away by investing in both Aim International and Prudential Real 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 Prudential Real 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 Prudential Real Estate, you can compare the effects of market volatilities on Aim International and Prudential Real 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 Prudential Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aim International and Prudential Real.
Diversification Opportunities for Aim International and Prudential Real
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aim and Prudential is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Aim International Mutual and Prudential Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Real Estate 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 Prudential Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Real Estate has no effect on the direction of Aim International i.e., Aim International and Prudential Real go up and down completely randomly.
Pair Corralation between Aim International and Prudential Real
Assuming the 90 days horizon Aim International Mutual is expected to generate 0.96 times more return on investment than Prudential Real. However, Aim International Mutual is 1.04 times less risky than Prudential Real. It trades about 0.08 of its potential returns per unit of risk. Prudential Real Estate is currently generating about 0.07 per unit of risk. If you would invest 2,030 in Aim International Mutual on September 4, 2024 and sell it today you would earn a total of 216.00 from holding Aim International Mutual or generate 10.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 30.71% |
| Values | Daily Returns |
Aim International Mutual vs. Prudential Real Estate
Performance |
| Timeline |
| Aim International Mutual |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Prudential Real Estate |
Aim International and Prudential Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aim International and Prudential Real
The main advantage of trading using opposite Aim International and Prudential Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aim International position performs unexpectedly, Prudential Real 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 Prudential Real will offset losses from the drop in Prudential Real's long position.| Aim International vs. Pender Real Estate | Aim International vs. Deutsche Real Estate | Aim International vs. Nuveen Real Estate | Aim International vs. Virtus Real Estate |
| Prudential Real vs. Realty Income | Prudential Real vs. Dynex Capital | Prudential Real vs. First Industrial Realty | Prudential Real vs. Healthcare Realty Trust |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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