Correlation Between AIM ETF and VelocityShares
Can any of the company-specific risk be diversified away by investing in both AIM ETF and VelocityShares 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 VelocityShares 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 VelocityShares 3x Long, you can compare the effects of market volatilities on AIM ETF and VelocityShares 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 VelocityShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and VelocityShares.
Diversification Opportunities for AIM ETF and VelocityShares
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AIM and VelocityShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and VelocityShares 3x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VelocityShares 3x Long 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 VelocityShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VelocityShares 3x Long has no effect on the direction of AIM ETF i.e., AIM ETF and VelocityShares go up and down completely randomly.
Pair Corralation between AIM ETF and VelocityShares
Given the investment horizon of 90 days AIM ETF Products is expected to generate 0.1 times more return on investment than VelocityShares. However, AIM ETF Products is 10.38 times less risky than VelocityShares. It trades about 0.15 of its potential returns per unit of risk. VelocityShares 3x Long is currently generating about -0.01 per unit of risk. If you would invest 2,502 in AIM ETF Products on September 1, 2024 and sell it today you would earn a total of 183.00 from holding AIM ETF Products or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 24.6% |
| Values | Daily Returns |
AIM ETF Products vs. VelocityShares 3x Long
Performance |
| Timeline |
| AIM ETF Products |
| VelocityShares 3x Long |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AIM ETF and VelocityShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM ETF and VelocityShares
The main advantage of trading using opposite AIM ETF and VelocityShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF position performs unexpectedly, VelocityShares 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 VelocityShares will offset losses from the drop in VelocityShares' 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 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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