Correlation Between AIM ETF and Capital Group
Can any of the company-specific risk be diversified away by investing in both AIM ETF and Capital Group 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 AIM ETF and Capital Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIM ETF Products and Capital Group Core, you can compare the effects of market volatilities on AIM ETF and Capital Group 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 AIM ETF with a short position of Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and Capital Group.
Diversification Opportunities for AIM ETF and Capital Group
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AIM and Capital is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and Capital Group Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Core and AIM ETF 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 AIM ETF Products are associated (or correlated) with Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Core has no effect on the direction of AIM ETF i.e., AIM ETF and Capital Group go up and down completely randomly.
Pair Corralation between AIM ETF and Capital Group
Given the investment horizon of 90 days AIM ETF is expected to generate 1.48 times less return on investment than Capital Group. But when comparing it to its historical volatility, AIM ETF Products is 2.09 times less risky than Capital Group. It trades about 0.25 of its potential returns per unit of risk. Capital Group Core is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,009 in Capital Group Core on September 3, 2024 and sell it today you would earn a total of 187.00 from holding Capital Group Core or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIM ETF Products vs. Capital Group Core
Performance |
| Timeline |
| AIM ETF Products |
| Capital Group Core |
AIM ETF and Capital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM ETF and Capital Group
The main advantage of trading using opposite AIM ETF and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group's long position.| AIM ETF vs. FT Vest Equity | AIM ETF vs. Northern Lights | AIM ETF vs. Dimensional International High | AIM ETF vs. JPMorgan Fundamental Data |
| Capital Group vs. First Trust Multi Asset | Capital Group vs. Collaborative Investment Series | Capital Group vs. EA Series Trust | Capital Group vs. Ocean Park International |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |