Correlation Between ZSPY and AIM ETF
Can any of the company-specific risk be diversified away by investing in both ZSPY and AIM ETF 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 ZSPY and AIM ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZSPY and AIM ETF Products, you can compare the effects of market volatilities on ZSPY and AIM ETF 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 ZSPY with a short position of AIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZSPY and AIM ETF.
Diversification Opportunities for ZSPY and AIM ETF
Almost no diversification
The 3 months correlation between ZSPY and AIM is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding ZSPY and AIM ETF Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM ETF Products and ZSPY 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 ZSPY are associated (or correlated) with AIM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIM ETF Products has no effect on the direction of ZSPY i.e., ZSPY and AIM ETF go up and down completely randomly.
Pair Corralation between ZSPY and AIM ETF
Given the investment horizon of 90 days ZSPY is expected to generate 4.4 times more return on investment than AIM ETF. However, ZSPY is 4.4 times more volatile than AIM ETF Products. It trades about 0.1 of its potential returns per unit of risk. AIM ETF Products is currently generating about 0.12 per unit of risk. If you would invest 2,506 in ZSPY on September 13, 2024 and sell it today you would earn a total of 476.00 from holding ZSPY or generate 18.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 24.09% |
| Values | Daily Returns |
ZSPY vs. AIM ETF Products
Performance |
| Timeline |
| ZSPY |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AIM ETF Products |
ZSPY and AIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZSPY and AIM ETF
The main advantage of trading using opposite ZSPY and AIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZSPY position performs unexpectedly, AIM ETF 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 ETF will offset losses from the drop in AIM ETF's long position.The idea behind ZSPY and AIM ETF Products pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AIM ETF vs. AIM ETF Products | AIM ETF vs. AIM ETF Products | AIM ETF vs. AIM ETF Products | AIM ETF vs. AIM ETF Products |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |