Correlation Between Quality Houses and AIM Industrial
Can any of the company-specific risk be diversified away by investing in both Quality Houses and AIM Industrial 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 Quality Houses and AIM Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quality Houses Property and AIM Industrial Growth, you can compare the effects of market volatilities on Quality Houses and AIM Industrial 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 Quality Houses with a short position of AIM Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quality Houses and AIM Industrial.
Diversification Opportunities for Quality Houses and AIM Industrial
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Quality and AIM is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Quality Houses Property and AIM Industrial Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM Industrial Growth and Quality Houses 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 Quality Houses Property are associated (or correlated) with AIM Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIM Industrial Growth has no effect on the direction of Quality Houses i.e., Quality Houses and AIM Industrial go up and down completely randomly.
Pair Corralation between Quality Houses and AIM Industrial
Assuming the 90 days trading horizon Quality Houses Property is expected to under-perform the AIM Industrial. In addition to that, Quality Houses is 34.25 times more volatile than AIM Industrial Growth. It trades about -0.23 of its total potential returns per unit of risk. AIM Industrial Growth is currently generating about -0.07 per unit of volatility. If you would invest 1,050 in AIM Industrial Growth on November 2, 2024 and sell it today you would lose (10.00) from holding AIM Industrial Growth or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quality Houses Property vs. AIM Industrial Growth
Performance |
| Timeline |
| Quality Houses Property |
| AIM Industrial Growth |
Quality Houses and AIM Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quality Houses and AIM Industrial
The main advantage of trading using opposite Quality Houses and AIM Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quality Houses position performs unexpectedly, AIM Industrial 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 Industrial will offset losses from the drop in AIM Industrial's long position.| Quality Houses vs. Quality Houses Hotel | Quality Houses vs. LH Shopping Centers | Quality Houses vs. LH Hotel Leasehold | Quality Houses vs. Future Park Leasehold |
| AIM Industrial vs. Amata Summit Growth | AIM Industrial vs. WHA Premium Growth | AIM Industrial vs. Digital Telecommunications Infrastructure | AIM Industrial vs. Quality Houses Property |
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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