Correlation Between AIM ETF and Sporting Clube

Can any of the company-specific risk be diversified away by investing in both AIM ETF and Sporting Clube 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 ETF and Sporting Clube into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AIM ETF Products and Sporting Clube de, you can compare the effects of market volatilities on AIM ETF and Sporting Clube 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 ETF with a short position of Sporting Clube. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and Sporting Clube.

Diversification Opportunities for AIM ETF and Sporting Clube

0.02

Correlation Coefficient

AIM ETF  Sporting Clube

Significant diversification

The 3 months correlation between AIM and Sporting is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and Sporting Clube de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sporting Clube de and AIM ETF 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 ETF Products are associated (or correlated) with Sporting Clube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sporting Clube de has no effect on the direction of AIM ETF i.e., AIM ETF and Sporting Clube go up and down completely randomly.

Pair Corralation between AIM ETF and Sporting Clube

Given the investment horizon of 90 days AIM ETF Products is expected to under-perform the Sporting Clube. But the etf apears to be less risky and, when comparing its historical volatility, AIM ETF Products is 22.37 times less risky than Sporting Clube. The etf trades about -0.02 of its potential returns per unit of risk. The Sporting Clube de is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  94.00  in Sporting Clube de on January 26, 2024 and sell it today you would earn a total of  2.00  from holding Sporting Clube de or generate 2.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

AIM ETF Products  vs.  Sporting Clube de

AIM ETF Products

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AIM ETF Products are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, AIM ETF is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Sporting Clube de

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sporting Clube de are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Sporting Clube may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with AIM ETF and Sporting Clube

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

The idea behind AIM ETF Products and Sporting Clube de 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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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.