Correlation Between AIM ETF and Vanguard Value
Can any of the company-specific risk be diversified away by investing in both AIM ETF and Vanguard Value 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 Vanguard Value 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 Vanguard Value Index, you can compare the effects of market volatilities on AIM ETF and Vanguard Value 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 Vanguard Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and Vanguard Value.
Diversification Opportunities for AIM ETF and Vanguard Value
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AIM and Vanguard is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and Vanguard Value Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Value Index 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 Vanguard Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Value Index has no effect on the direction of AIM ETF i.e., AIM ETF and Vanguard Value go up and down completely randomly.
Pair Corralation between AIM ETF and Vanguard Value
Given the investment horizon of 90 days AIM ETF Products is expected to generate 0.29 times more return on investment than Vanguard Value. However, AIM ETF Products is 3.4 times less risky than Vanguard Value. It trades about 0.15 of its potential returns per unit of risk. Vanguard Value Index is currently generating about -0.19 per unit of risk. If you would invest 2,677 in AIM ETF Products on September 19, 2024 and sell it today you would earn a total of 13.00 from holding AIM ETF Products or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIM ETF Products vs. Vanguard Value Index
Performance |
| Timeline |
| AIM ETF Products |
| Vanguard Value Index |
AIM ETF and Vanguard Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM ETF and Vanguard Value
The main advantage of trading using opposite AIM ETF and Vanguard Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF position performs unexpectedly, Vanguard Value 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 Vanguard Value will offset losses from the drop in Vanguard Value's long position.| AIM ETF vs. FT Vest Equity | AIM ETF vs. Northern Lights | AIM ETF vs. Dimensional International High | AIM ETF vs. JPMorgan Fundamental Data |
| Vanguard Value vs. Vanguard Growth Index | Vanguard Value vs. Vanguard Small Cap Value | Vanguard Value vs. Vanguard Mid Cap Value | Vanguard Value vs. Vanguard Small Cap Index |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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