Correlation Between Great-west Goldman and Aim Treasurers
Can any of the company-specific risk be diversified away by investing in both Great-west Goldman and Aim Treasurers 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 Great-west Goldman and Aim Treasurers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Goldman Sachs and Aim Treasurers Series, you can compare the effects of market volatilities on Great-west Goldman and Aim Treasurers 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 Great-west Goldman with a short position of Aim Treasurers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great-west Goldman and Aim Treasurers.
Diversification Opportunities for Great-west Goldman and Aim Treasurers
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Great-west and Aim is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Great West Goldman Sachs and Aim Treasurers Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Treasurers Series and Great-west Goldman 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 Great West Goldman Sachs are associated (or correlated) with Aim Treasurers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim Treasurers Series has no effect on the direction of Great-west Goldman i.e., Great-west Goldman and Aim Treasurers go up and down completely randomly.
Pair Corralation between Great-west Goldman and Aim Treasurers
Assuming the 90 days horizon Great West Goldman Sachs is expected to generate 5.95 times more return on investment than Aim Treasurers. However, Great-west Goldman is 5.95 times more volatile than Aim Treasurers Series. It trades about 0.1 of its potential returns per unit of risk. Aim Treasurers Series is currently generating about 0.14 per unit of risk. If you would invest 747.00 in Great West Goldman Sachs on September 4, 2024 and sell it today you would earn a total of 273.00 from holding Great West Goldman Sachs or generate 36.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Goldman Sachs vs. Aim Treasurers Series
Performance |
| Timeline |
| Great West Goldman |
| Aim Treasurers Series |
Great-west Goldman and Aim Treasurers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great-west Goldman and Aim Treasurers
The main advantage of trading using opposite Great-west Goldman and Aim Treasurers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great-west Goldman position performs unexpectedly, Aim Treasurers 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 Aim Treasurers will offset losses from the drop in Aim Treasurers' long position.The idea behind Great West Goldman Sachs and Aim Treasurers Series pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Aim Treasurers vs. Great West Goldman Sachs | Aim Treasurers vs. Oppenheimer Gold Special | Aim Treasurers vs. Precious Metals And | Aim Treasurers vs. Goldman Sachs Short |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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