Correlation Between Aim Treasurers and Towpath Technology

Can any of the company-specific risk be diversified away by investing in both Aim Treasurers and Towpath Technology 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 Treasurers and Towpath Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aim Treasurers Series and Towpath Technology, you can compare the effects of market volatilities on Aim Treasurers and Towpath Technology 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 Treasurers with a short position of Towpath Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aim Treasurers and Towpath Technology.

Diversification Opportunities for Aim Treasurers and Towpath Technology

0.14

Correlation Coefficient

Aim Treasurers  Towpath Technology

Average diversification

The 3 months correlation between Aim and Towpath is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aim Treasurers Series and Towpath Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Towpath Technology and Aim Treasurers 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 Treasurers Series are associated (or correlated) with Towpath Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Towpath Technology has no effect on the direction of Aim Treasurers i.e., Aim Treasurers and Towpath Technology go up and down completely randomly.

Pair Corralation between Aim Treasurers and Towpath Technology

Assuming the 90 days horizon Aim Treasurers Series is expected to generate 0.24 times more return on investment than Towpath Technology. However, Aim Treasurers Series is 4.11 times less risky than Towpath Technology. It trades about 0.15 of its potential returns per unit of risk. Towpath Technology is currently generating about -0.07 per unit of risk. If you would invest  99.00  in Aim Treasurers Series on January 25, 2024 and sell it today you would earn a total of  1.00  from holding Aim Treasurers Series or generate 1.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aim Treasurers Series  vs.  Towpath Technology

Aim Treasurers Series

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aim Treasurers Series are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aim Treasurers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Towpath Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Towpath Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Towpath Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aim Treasurers and Towpath Technology

The main advantage of trading using opposite Aim Treasurers and Towpath Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aim Treasurers position performs unexpectedly, Towpath Technology 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 Towpath Technology will offset losses from the drop in Towpath Technology's long position.

The idea behind Aim Treasurers Series and Towpath Technology 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.

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.