Correlation Between United Utilities and Aimfinity Investment
Can any of the company-specific risk be diversified away by investing in both United Utilities and Aimfinity 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 United Utilities and Aimfinity Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Utilities Group and Aimfinity Investment I, you can compare the effects of market volatilities on United Utilities and Aimfinity 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 United Utilities with a short position of Aimfinity Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Utilities and Aimfinity Investment.
Diversification Opportunities for United Utilities and Aimfinity Investment
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and Aimfinity is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding United Utilities Group and Aimfinity Investment I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimfinity Investment and United Utilities 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 United Utilities Group are associated (or correlated) with Aimfinity Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimfinity Investment has no effect on the direction of United Utilities i.e., United Utilities and Aimfinity Investment go up and down completely randomly.
Pair Corralation between United Utilities and Aimfinity Investment
Assuming the 90 days horizon United Utilities is expected to generate 1.05 times less return on investment than Aimfinity Investment. In addition to that, United Utilities is 3.0 times more volatile than Aimfinity Investment I. It trades about 0.09 of its total potential returns per unit of risk. Aimfinity Investment I is currently generating about 0.28 per unit of volatility. If you would invest 1,160 in Aimfinity Investment I on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Aimfinity Investment I or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
United Utilities Group vs. Aimfinity Investment I
Performance |
| Timeline |
| United Utilities |
| Aimfinity Investment |
United Utilities and Aimfinity Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Utilities and Aimfinity Investment
The main advantage of trading using opposite United Utilities and Aimfinity Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Utilities position performs unexpectedly, Aimfinity 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 Aimfinity Investment will offset losses from the drop in Aimfinity Investment's long position.| United Utilities vs. Artesian Resources | United Utilities vs. Global Water Resources | United Utilities vs. Essential Utilities | United Utilities vs. American Water Works |
| Aimfinity Investment vs. Weyco Group | Aimfinity Investment vs. Pool Corporation | Aimfinity Investment vs. Lululemon Athletica | Aimfinity Investment vs. Planet Fitness |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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