Correlation Between Aig Government and Aim Investment
Can any of the company-specific risk be diversified away by investing in both Aig Government and Aim Investment 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 Aig Government and Aim Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aig Government Money and Aim Investment Funds, you can compare the effects of market volatilities on Aig Government and Aim Investment 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 Aig Government with a short position of Aim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Aim Investment.
Diversification Opportunities for Aig Government and Aim Investment
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aig and Aim is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Aim Investment Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Investment Funds and Aig Government 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 Aig Government Money are associated (or correlated) with Aim Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim Investment Funds has no effect on the direction of Aig Government i.e., Aig Government and Aim Investment go up and down completely randomly.
Pair Corralation between Aig Government and Aim Investment
Assuming the 90 days horizon Aig Government Money is expected to generate 0.59 times more return on investment than Aim Investment. However, Aig Government Money is 1.7 times less risky than Aim Investment. It trades about 0.07 of its potential returns per unit of risk. Aim Investment Funds is currently generating about 0.03 per unit of risk. If you would invest 1,004 in Aig Government Money on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Aig Government Money or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Aim Investment Funds
Performance |
| Timeline |
| Aig Government Money |
| Aim Investment Funds |
Aig Government and Aim Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Aim Investment
The main advantage of trading using opposite Aig Government and Aim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Aim Investment 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 Aim Investment will offset losses from the drop in Aim Investment's long position.| Aig Government vs. Simt Multi Asset Accumulation | Aig Government vs. Simt Small Cap | Aig Government vs. Tax Free Conservative Income | Aig Government vs. Tax Free Conservative |
| Aim Investment vs. Invesco Municipal Income | Aim Investment vs. Invesco Municipal Income | Aim Investment vs. Invesco Municipal Income | Aim Investment vs. Oppenheimer Rising Dividends |
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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