Correlation Between Cref Money and Aim Investment
Can any of the company-specific risk be diversified away by investing in both Cref Money 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 Cref Money and Aim Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Money Market and Aim Investment Secs, you can compare the effects of market volatilities on Cref Money 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 Cref Money with a short position of Aim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Money and Aim Investment.
Diversification Opportunities for Cref Money and Aim Investment
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cref and Aim is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Cref Money Market 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 Cref Money 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 Cref Money Market 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 Cref Money i.e., Cref Money and Aim Investment go up and down completely randomly.
Pair Corralation between Cref Money and Aim Investment
Assuming the 90 days trading horizon Cref Money Market is expected to generate 0.21 times more return on investment than Aim Investment. However, Cref Money Market is 4.87 times less risky than Aim Investment. It trades about 0.79 of its potential returns per unit of risk. Aim Investment Secs is currently generating about 0.12 per unit of risk. If you would invest 2,696 in Cref Money Market on August 28, 2024 and sell it today you would earn a total of 274.00 from holding Cref Money Market or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.17% |
| Values | Daily Returns |
Cref Money Market vs. Aim Investment Secs
Performance |
| Timeline |
| Cref Money Market |
| Aim Investment Secs |
Cref Money and Aim Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Money and Aim Investment
The main advantage of trading using opposite Cref Money and Aim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Money 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.| Cref Money vs. Vanguard Total Stock | Cref Money vs. Vanguard 500 Index | Cref Money vs. Vanguard Total Stock | Cref Money vs. Vanguard Total Stock |
| Aim Investment vs. Vanguard Short Term Government | Aim Investment vs. Inverse Government Long | Aim Investment vs. Fidelity Series Government | Aim Investment vs. Ab Government Exchange |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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