Correlation Between AIM ETF and Gotham Enhanced
Can any of the company-specific risk be diversified away by investing in both AIM ETF and Gotham Enhanced 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 Gotham Enhanced 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 Gotham Enhanced 500, you can compare the effects of market volatilities on AIM ETF and Gotham Enhanced 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 Gotham Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and Gotham Enhanced.
Diversification Opportunities for AIM ETF and Gotham Enhanced
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AIM and Gotham is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and Gotham Enhanced 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gotham Enhanced 500 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 Gotham Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gotham Enhanced 500 has no effect on the direction of AIM ETF i.e., AIM ETF and Gotham Enhanced go up and down completely randomly.
Pair Corralation between AIM ETF and Gotham Enhanced
Given the investment horizon of 90 days AIM ETF is expected to generate 1.98 times less return on investment than Gotham Enhanced. But when comparing it to its historical volatility, AIM ETF Products is 2.2 times less risky than Gotham Enhanced. It trades about 0.15 of its potential returns per unit of risk. Gotham Enhanced 500 is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,881 in Gotham Enhanced 500 on September 1, 2024 and sell it today you would earn a total of 428.00 from holding Gotham Enhanced 500 or generate 14.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
AIM ETF Products vs. Gotham Enhanced 500
Performance |
| Timeline |
| AIM ETF Products |
| Gotham Enhanced 500 |
AIM ETF and Gotham Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM ETF and Gotham Enhanced
The main advantage of trading using opposite AIM ETF and Gotham Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF position performs unexpectedly, Gotham Enhanced 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 Gotham Enhanced will offset losses from the drop in Gotham Enhanced's long position.| AIM ETF vs. FT Vest Equity | AIM ETF vs. Northern Lights | AIM ETF vs. Dimensional International High | AIM ETF vs. Matthews China Discovery |
| Gotham Enhanced vs. Vanguard Total Stock | Gotham Enhanced vs. SPDR SP 500 | Gotham Enhanced vs. iShares Core SP | Gotham Enhanced vs. Vanguard Dividend Appreciation |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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