Correlation Between AIM ETF and WisdomTree Emerging
Can any of the company-specific risk be diversified away by investing in both AIM ETF and WisdomTree Emerging 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 WisdomTree Emerging 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 WisdomTree Emerging Markets, you can compare the effects of market volatilities on AIM ETF and WisdomTree Emerging 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 WisdomTree Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and WisdomTree Emerging.
Diversification Opportunities for AIM ETF and WisdomTree Emerging
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AIM and WisdomTree is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and WisdomTree Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Emerging 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 WisdomTree Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Emerging has no effect on the direction of AIM ETF i.e., AIM ETF and WisdomTree Emerging go up and down completely randomly.
Pair Corralation between AIM ETF and WisdomTree Emerging
Given the investment horizon of 90 days AIM ETF Products is expected to generate 0.32 times more return on investment than WisdomTree Emerging. However, AIM ETF Products is 3.1 times less risky than WisdomTree Emerging. It trades about 0.26 of its potential returns per unit of risk. WisdomTree Emerging Markets is currently generating about -0.01 per unit of risk. If you would invest 2,592 in AIM ETF Products on September 12, 2024 and sell it today you would earn a total of 95.00 from holding AIM ETF Products or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIM ETF Products vs. WisdomTree Emerging Markets
Performance |
| Timeline |
| AIM ETF Products |
| WisdomTree Emerging |
AIM ETF and WisdomTree Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM ETF and WisdomTree Emerging
The main advantage of trading using opposite AIM ETF and WisdomTree Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF position performs unexpectedly, WisdomTree Emerging 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 WisdomTree Emerging will offset losses from the drop in WisdomTree Emerging's long position.| AIM ETF vs. Innovator ETFs Trust | AIM ETF vs. First Trust Cboe | AIM ETF vs. FT Cboe Vest | AIM ETF vs. Innovator SP 500 |
| WisdomTree Emerging vs. WisdomTree International Multifactor | WisdomTree Emerging vs. WisdomTree Europe Quality | WisdomTree Emerging vs. PIMCO RAFI Dynamic | WisdomTree Emerging vs. SPDR MSCI Emerging |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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