Correlation Between AIM ETF and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both AIM ETF and IShares 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 IShares 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 iShares MSCI World, you can compare the effects of market volatilities on AIM ETF and IShares 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and IShares MSCI.
Diversification Opportunities for AIM ETF and IShares MSCI
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AIM and IShares is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and iShares MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI World 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI World has no effect on the direction of AIM ETF i.e., AIM ETF and IShares MSCI go up and down completely randomly.
Pair Corralation between AIM ETF and IShares MSCI
Given the investment horizon of 90 days AIM ETF is expected to generate 1.24 times less return on investment than IShares MSCI. But when comparing it to its historical volatility, AIM ETF Products is 1.66 times less risky than IShares MSCI. It trades about 0.18 of its potential returns per unit of risk. iShares MSCI World is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 15,516 in iShares MSCI World on October 20, 2024 and sell it today you would earn a total of 324.00 from holding iShares MSCI World or generate 2.09% 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. iShares MSCI World
Performance |
| Timeline |
| AIM ETF Products |
| iShares MSCI World |
AIM ETF and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM ETF and IShares MSCI
The main advantage of trading using opposite AIM ETF and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF position performs unexpectedly, IShares 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 IShares MSCI will offset losses from the drop in IShares 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 |
| IShares MSCI vs. Freedom Day Dividend | IShares MSCI vs. iShares MSCI China | IShares MSCI vs. SmartETFs Dividend Builder | IShares MSCI vs. Listed Funds Trust |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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