Correlation Between AIM ETF and Xtrackers MSCI
Can any of the company-specific risk be diversified away by investing in both AIM ETF and Xtrackers MSCI 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 Xtrackers MSCI 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 Xtrackers MSCI Kokusai, you can compare the effects of market volatilities on AIM ETF and Xtrackers MSCI 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 Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and Xtrackers MSCI.
Diversification Opportunities for AIM ETF and Xtrackers MSCI
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AIM and Xtrackers is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and Xtrackers MSCI Kokusai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI Kokusai 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 Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI Kokusai has no effect on the direction of AIM ETF i.e., AIM ETF and Xtrackers MSCI go up and down completely randomly.
Pair Corralation between AIM ETF and Xtrackers MSCI
Given the investment horizon of 90 days AIM ETF is expected to generate 2.12 times less return on investment than Xtrackers MSCI. But when comparing it to its historical volatility, AIM ETF Products is 1.64 times less risky than Xtrackers MSCI. It trades about 0.2 of its potential returns per unit of risk. Xtrackers MSCI Kokusai is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 10,032 in Xtrackers MSCI Kokusai on November 2, 2024 and sell it today you would earn a total of 425.00 from holding Xtrackers MSCI Kokusai or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
AIM ETF Products vs. Xtrackers MSCI Kokusai
Performance |
| Timeline |
| AIM ETF Products |
| Xtrackers MSCI Kokusai |
AIM ETF and Xtrackers MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM ETF and Xtrackers MSCI
The main advantage of trading using opposite AIM ETF and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF position performs unexpectedly, Xtrackers MSCI 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 Xtrackers MSCI will offset losses from the drop in Xtrackers MSCI'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 |
| Xtrackers MSCI vs. Davis Select International | Xtrackers MSCI vs. Tidal ETF Trust | Xtrackers MSCI vs. Principal Value ETF | Xtrackers MSCI vs. WisdomTree Emerging Markets |
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 CEOs Directory module to screen CEOs from public companies around the world.
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