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 Bloomberg, 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
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AIM and First is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and First Trust Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Bloomberg 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 Bloomberg 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 96.95 times more return on investment than First Trust. However, AIM ETF is 96.95 times more volatile than First Trust Bloomberg. It trades about 0.08 of its potential returns per unit of risk. First Trust Bloomberg is currently generating about 0.1 per unit of risk. If you would invest 0.01 in AIM ETF Products on August 30, 2024 and sell it today you would earn a total of 2,680 from holding AIM ETF Products or generate 2.67999E7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 34.7% |
| Values | Daily Returns |
AIM ETF Products vs. First Trust Bloomberg
Performance |
| Timeline |
| AIM ETF Products |
| First Trust Bloomberg |
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. ABIVAX Socit Anonyme | AIM ETF vs. Pinnacle Sherman Multi Strategy | AIM ETF vs. Morningstar Unconstrained Allocation | AIM ETF vs. SPACE |
| First Trust vs. JPMorgan BetaBuilders International | First Trust vs. JPMorgan Core Plus | First Trust vs. JPMorgan BetaBuilders Canada | First Trust vs. JPMorgan 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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