Correlation Between AIM ETF and SPDR SSGA
Can any of the company-specific risk be diversified away by investing in both AIM ETF and SPDR SSGA 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 SPDR SSGA 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 SPDR SSGA Gender, you can compare the effects of market volatilities on AIM ETF and SPDR SSGA 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 SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and SPDR SSGA.
Diversification Opportunities for AIM ETF and SPDR SSGA
Very poor diversification
The 3 months correlation between AIM and SPDR is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and SPDR SSGA Gender in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA Gender 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 SPDR SSGA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSGA Gender has no effect on the direction of AIM ETF i.e., AIM ETF and SPDR SSGA go up and down completely randomly.
Pair Corralation between AIM ETF and SPDR SSGA
Given the investment horizon of 90 days AIM ETF is expected to generate 3.35 times less return on investment than SPDR SSGA. But when comparing it to its historical volatility, AIM ETF Products is 4.03 times less risky than SPDR SSGA. It trades about 0.51 of its potential returns per unit of risk. SPDR SSGA Gender is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 11,376 in SPDR SSGA Gender on September 1, 2024 and sell it today you would earn a total of 748.00 from holding SPDR SSGA Gender or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIM ETF Products vs. SPDR SSGA Gender
Performance |
| Timeline |
| AIM ETF Products |
| SPDR SSGA Gender |
AIM ETF and SPDR SSGA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM ETF and SPDR SSGA
The main advantage of trading using opposite AIM ETF and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF position performs unexpectedly, SPDR SSGA 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 SPDR SSGA will offset losses from the drop in SPDR SSGA'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 |
| SPDR SSGA vs. iShares MSCI ACWI | SPDR SSGA vs. iShares MSCI USA | SPDR SSGA vs. SPDR SP 500 | SPDR SSGA vs. iShares MSCI KLD |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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