Correlation Between AIM ETF and HCM Defender
Can any of the company-specific risk be diversified away by investing in both AIM ETF and HCM Defender 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 HCM Defender 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 HCM Defender 500, you can compare the effects of market volatilities on AIM ETF and HCM Defender 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 HCM Defender. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and HCM Defender.
Diversification Opportunities for AIM ETF and HCM Defender
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AIM and HCM is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and HCM Defender 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCM Defender 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 HCM Defender. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCM Defender 500 has no effect on the direction of AIM ETF i.e., AIM ETF and HCM Defender go up and down completely randomly.
Pair Corralation between AIM ETF and HCM Defender
Given the investment horizon of 90 days AIM ETF is expected to generate 1.81 times less return on investment than HCM Defender. But when comparing it to its historical volatility, AIM ETF Products is 2.7 times less risky than HCM Defender. It trades about 0.15 of its potential returns per unit of risk. HCM Defender 500 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,774 in HCM Defender 500 on September 2, 2024 and sell it today you would earn a total of 1,633 from holding HCM Defender 500 or generate 43.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 34.14% |
| Values | Daily Returns |
AIM ETF Products vs. HCM Defender 500
Performance |
| Timeline |
| AIM ETF Products |
| HCM Defender 500 |
AIM ETF and HCM Defender Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM ETF and HCM Defender
The main advantage of trading using opposite AIM ETF and HCM Defender positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF position performs unexpectedly, HCM Defender 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 HCM Defender will offset losses from the drop in HCM Defender'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 |
| HCM Defender vs. HCM Defender 100 | HCM Defender vs. Overlay Shares Large | HCM Defender vs. VanEck LongFlat Trend | HCM Defender vs. LeaderSharesTM AlphaFactor Core |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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