Correlation Between Ppm High and Aim Investment
Can any of the company-specific risk be diversified away by investing in both Ppm High and Aim Investment 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 Ppm High and Aim Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ppm High Yield and Aim Investment Secs, you can compare the effects of market volatilities on Ppm High and Aim Investment 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 Ppm High with a short position of Aim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ppm High and Aim Investment.
Diversification Opportunities for Ppm High and Aim Investment
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ppm and Aim is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ppm High Yield and Aim Investment Secs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Investment Secs and Ppm High 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 Ppm High Yield are associated (or correlated) with Aim Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim Investment Secs has no effect on the direction of Ppm High i.e., Ppm High and Aim Investment go up and down completely randomly.
Pair Corralation between Ppm High and Aim Investment
Assuming the 90 days horizon Ppm High Yield is expected to generate 1.4 times more return on investment than Aim Investment. However, Ppm High is 1.4 times more volatile than Aim Investment Secs. It trades about 0.22 of its potential returns per unit of risk. Aim Investment Secs is currently generating about 0.13 per unit of risk. If you would invest 856.00 in Ppm High Yield on September 1, 2024 and sell it today you would earn a total of 43.00 from holding Ppm High Yield or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ppm High Yield vs. Aim Investment Secs
Performance |
| Timeline |
| Ppm High Yield |
| Aim Investment Secs |
Ppm High and Aim Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ppm High and Aim Investment
The main advantage of trading using opposite Ppm High and Aim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ppm High position performs unexpectedly, Aim Investment 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 Investment will offset losses from the drop in Aim Investment's long position.| Ppm High vs. Oppenheimer International Diversified | Ppm High vs. Western Asset Diversified | Ppm High vs. Aqr Diversified Arbitrage | Ppm High vs. Principal Lifetime Hybrid |
| Aim Investment vs. Cref Money Market | Aim Investment vs. Franklin Government Money | Aim Investment vs. T Rowe Price | Aim Investment vs. Jpmorgan Trust I |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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