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 Europe, 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
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AIM and First is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and First Trust Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Europe 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 Europe 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 0.36 times more return on investment than First Trust. However, AIM ETF Products is 2.78 times less risky than First Trust. It trades about 0.14 of its potential returns per unit of risk. First Trust Europe is currently generating about -0.02 per unit of risk. If you would invest 2,519 in AIM ETF Products on September 3, 2024 and sell it today you would earn a total of 166.00 from holding AIM ETF Products or generate 6.59% 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. First Trust Europe
Performance |
| Timeline |
| AIM ETF Products |
| First Trust Europe |
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. JPMorgan Fundamental Data |
| First Trust vs. First Trust Emerging | First Trust vs. First Trust Developed | First Trust vs. First Trust Large | First Trust vs. First Trust Japan |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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