Correlation Between Pace Municipal and Aim International
Can any of the company-specific risk be diversified away by investing in both Pace Municipal and Aim International 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 Pace Municipal and Aim International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Municipal Fixed and Aim International Mutual, you can compare the effects of market volatilities on Pace Municipal and Aim International 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 Pace Municipal with a short position of Aim International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Municipal and Aim International.
Diversification Opportunities for Pace Municipal and Aim International
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pace and Aim is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Pace Municipal Fixed and Aim International Mutual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim International Mutual and Pace Municipal 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 Pace Municipal Fixed are associated (or correlated) with Aim International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim International Mutual has no effect on the direction of Pace Municipal i.e., Pace Municipal and Aim International go up and down completely randomly.
Pair Corralation between Pace Municipal and Aim International
Assuming the 90 days horizon Pace Municipal Fixed is expected to generate 0.17 times more return on investment than Aim International. However, Pace Municipal Fixed is 5.72 times less risky than Aim International. It trades about 0.04 of its potential returns per unit of risk. Aim International Mutual is currently generating about -0.01 per unit of risk. If you would invest 1,198 in Pace Municipal Fixed on November 9, 2024 and sell it today you would earn a total of 23.00 from holding Pace Municipal Fixed or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Pace Municipal Fixed vs. Aim International Mutual
Performance |
| Timeline |
| Pace Municipal Fixed |
| Aim International Mutual |
Pace Municipal and Aim International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Municipal and Aim International
The main advantage of trading using opposite Pace Municipal and Aim International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Municipal position performs unexpectedly, Aim International 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 International will offset losses from the drop in Aim International's long position.| Pace Municipal vs. Astor Star Fund | Pace Municipal vs. Auxier Focus Fund | Pace Municipal vs. Bbh Partner Fund | Pace Municipal vs. Aqr Long Short Equity |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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