Correlation Between AIM ETF and First Trust
Can any of the company-specific risk be diversified away by investing in both AIM ETF and First Trust 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 First Trust 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 First Trust Emerging, you can compare the effects of market volatilities on AIM ETF and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and First Trust.
Diversification Opportunities for AIM ETF and First Trust
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AIM and First is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and First Trust Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Emerging has no effect on the direction of AIM ETF i.e., AIM ETF and First Trust go up and down completely randomly.
Pair Corralation between AIM ETF and First Trust
Given the investment horizon of 90 days AIM ETF Products is expected to generate 114.76 times more return on investment than First Trust. However, AIM ETF is 114.76 times more volatile than First Trust Emerging. It trades about 0.08 of its potential returns per unit of risk. First Trust Emerging is currently generating about 0.04 per unit of risk. If you would invest 0.01 in AIM ETF Products on August 24, 2024 and sell it today you would earn a total of 2,678 from holding AIM ETF Products or generate 2.67799E7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 34.27% |
| Values | Daily Returns |
AIM ETF Products vs. First Trust Emerging
Performance |
| Timeline |
| AIM ETF Products |
| First Trust Emerging |
AIM ETF and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM ETF and First Trust
The main advantage of trading using opposite AIM ETF and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| AIM ETF vs. FT Vest Equity | AIM ETF vs. Northern Lights | AIM ETF vs. Dimensional International High | AIM ETF vs. First Trust Exchange Traded |
| First Trust vs. First Trust SSI | First Trust vs. First Trust BuyWrite | First Trust vs. First Trust Managed | First Trust vs. First Trust Tactical |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Global Correlations Find global opportunities by holding instruments from different markets |