Correlation Between AdvisorShares and AIM ETF
Can any of the company-specific risk be diversified away by investing in both AdvisorShares and AIM ETF 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 AdvisorShares and AIM ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AdvisorShares and AIM ETF Products, you can compare the effects of market volatilities on AdvisorShares and AIM ETF 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 AdvisorShares with a short position of AIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of AdvisorShares and AIM ETF.
Diversification Opportunities for AdvisorShares and AIM ETF
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AdvisorShares and AIM is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding AdvisorShares and AIM ETF Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM ETF Products and AdvisorShares 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 AdvisorShares are associated (or correlated) with AIM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIM ETF Products has no effect on the direction of AdvisorShares i.e., AdvisorShares and AIM ETF go up and down completely randomly.
Pair Corralation between AdvisorShares and AIM ETF
If you would invest 2,939 in AIM ETF Products on September 1, 2024 and sell it today you would earn a total of 83.00 from holding AIM ETF Products or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
AdvisorShares vs. AIM ETF Products
Performance |
| Timeline |
| AdvisorShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AIM ETF Products |
AdvisorShares and AIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AdvisorShares and AIM ETF
The main advantage of trading using opposite AdvisorShares and AIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AdvisorShares position performs unexpectedly, AIM ETF 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 ETF will offset losses from the drop in AIM ETF's long position.| AdvisorShares vs. First Trust Managed | AdvisorShares vs. IQ Hedge Multi Strategy | AdvisorShares vs. First Trust BuyWrite | AdvisorShares vs. SPDR SSgA Global |
| AIM ETF vs. AIM ETF Products | AIM ETF vs. First Trust Exchange Traded | AIM ETF vs. Innovator ETFs Trust | AIM ETF vs. Innovator ETFs Trust |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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