Correlation Between AIM ETF and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both AIM ETF and BNY Mellon 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 ETF and BNY Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIM ETF Products and BNY Mellon High, you can compare the effects of market volatilities on AIM ETF and BNY Mellon 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 ETF with a short position of BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and BNY Mellon.
Diversification Opportunities for AIM ETF and BNY Mellon
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AIM and BNY is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and BNY Mellon High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon High and AIM ETF 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 ETF Products are associated (or correlated) with BNY Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNY Mellon High has no effect on the direction of AIM ETF i.e., AIM ETF and BNY Mellon go up and down completely randomly.
Pair Corralation between AIM ETF and BNY Mellon
Given the investment horizon of 90 days AIM ETF is expected to generate 1.78 times less return on investment than BNY Mellon. But when comparing it to its historical volatility, AIM ETF Products is 1.42 times less risky than BNY Mellon. It trades about 0.11 of its potential returns per unit of risk. BNY Mellon High is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 229.00 in BNY Mellon High on August 24, 2024 and sell it today you would earn a total of 35.00 from holding BNY Mellon High or generate 15.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
AIM ETF Products vs. BNY Mellon High
Performance |
| Timeline |
| AIM ETF Products |
| BNY Mellon High |
AIM ETF and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM ETF and BNY Mellon
The main advantage of trading using opposite AIM ETF and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF position performs unexpectedly, BNY Mellon 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 BNY Mellon will offset losses from the drop in BNY Mellon's long position.| AIM ETF vs. AIM ETF Products | AIM ETF vs. AIM ETF Products | AIM ETF vs. AIM ETF Products | AIM ETF vs. AIM ETF Products |
| BNY Mellon vs. Credit Suisse Asset | BNY Mellon vs. Mfs Intermediate High | BNY Mellon vs. Eaton Vance Risk | BNY Mellon vs. Nuveen Floating Rate |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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