Correlation Between AAM Low and ETF Series
Can any of the company-specific risk be diversified away by investing in both AAM Low and ETF Series 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 AAM Low and ETF Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAM Low Duration and ETF Series Solutions, you can compare the effects of market volatilities on AAM Low and ETF Series 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 AAM Low with a short position of ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAM Low and ETF Series.
Diversification Opportunities for AAM Low and ETF Series
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AAM and ETF is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding AAM Low Duration and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions and AAM Low 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 AAM Low Duration are associated (or correlated) with ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of AAM Low i.e., AAM Low and ETF Series go up and down completely randomly.
Pair Corralation between AAM Low and ETF Series
Given the investment horizon of 90 days AAM Low is expected to generate 2.9 times less return on investment than ETF Series. But when comparing it to its historical volatility, AAM Low Duration is 1.7 times less risky than ETF Series. It trades about 0.05 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,214 in ETF Series Solutions on August 30, 2024 and sell it today you would earn a total of 964.00 from holding ETF Series Solutions or generate 43.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAM Low Duration vs. ETF Series Solutions
Performance |
| Timeline |
| AAM Low Duration |
| ETF Series Solutions |
AAM Low and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAM Low and ETF Series
The main advantage of trading using opposite AAM Low and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAM Low position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' long position.| AAM Low vs. Global X Variable | AAM Low vs. ETFis Series Trust | AAM Low vs. Innovator SP Investment | AAM Low vs. Principal Spectrum Preferred |
| ETF Series vs. AAM Low Duration | ETF Series vs. 6 Meridian Low | ETF Series vs. Exchange Listed Funds | ETF Series vs. 6 Meridian Mega |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |