Correlation Between Intermediate Government and Aim Investment
Can any of the company-specific risk be diversified away by investing in both Intermediate 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 Intermediate 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 Intermediate Government Bond and Aim Investment Securities, you can compare the effects of market volatilities on Intermediate 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 Intermediate Government with a short position of Aim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Government and Aim Investment.
Diversification Opportunities for Intermediate Government and Aim Investment
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Intermediate and Aim is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Government Bond and Aim Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Investment Securities and Intermediate 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 Intermediate Government Bond 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 Securities has no effect on the direction of Intermediate Government i.e., Intermediate Government and Aim Investment go up and down completely randomly.
Pair Corralation between Intermediate Government and Aim Investment
If you would invest 100.00 in Aim Investment Securities on April 29, 2025 and sell it today you would earn a total of 0.00 from holding Aim Investment Securities or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intermediate Government Bond vs. Aim Investment Securities
Performance |
| Timeline |
| Intermediate Government |
| Aim Investment Securities |
Intermediate Government and Aim Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Government and Aim Investment
The main advantage of trading using opposite Intermediate Government and Aim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate 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.The idea behind Intermediate Government Bond and Aim Investment Securities 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.
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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