Correlation Between AIM ETF and Dow Jones
Can any of the company-specific risk be diversified away by investing in both AIM ETF and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on AIM ETF and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and Dow Jones.
Diversification Opportunities for AIM ETF and Dow Jones
Almost no diversification
The 3 months correlation between AIM and Dow is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of AIM ETF i.e., AIM ETF and Dow Jones go up and down completely randomly.
Pair Corralation between AIM ETF and Dow Jones
Given the investment horizon of 90 days AIM ETF Products is expected to generate 0.63 times more return on investment than Dow Jones. However, AIM ETF Products is 1.59 times less risky than Dow Jones. It trades about 0.16 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 2,504 in AIM ETF Products on September 3, 2024 and sell it today you would earn a total of 833.00 from holding AIM ETF Products or generate 33.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 81.01% |
| Values | Daily Returns |
AIM ETF Products vs. Dow Jones Industrial
Performance |
| Timeline |
AIM ETF and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
AIM ETF Products
Pair trading matchups for AIM ETF
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with AIM ETF and Dow Jones
The main advantage of trading using opposite AIM ETF and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| AIM ETF vs. Innovator ETFs Trust | AIM ETF vs. First Trust Cboe | AIM ETF vs. FT Cboe Vest | AIM ETF vs. Innovator SP 500 |
| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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