Correlation Between AIM Industrial and Amata Summit

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Can any of the company-specific risk be diversified away by investing in both AIM Industrial and Amata Summit 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 Industrial and Amata Summit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIM Industrial Growth and Amata Summit Growth, you can compare the effects of market volatilities on AIM Industrial and Amata Summit 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 Industrial with a short position of Amata Summit. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM Industrial and Amata Summit.

Diversification Opportunities for AIM Industrial and Amata Summit

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between AIM and Amata is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding AIM Industrial Growth and Amata Summit Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amata Summit Growth and AIM Industrial 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 Industrial Growth are associated (or correlated) with Amata Summit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amata Summit Growth has no effect on the direction of AIM Industrial i.e., AIM Industrial and Amata Summit go up and down completely randomly.

Pair Corralation between AIM Industrial and Amata Summit

Assuming the 90 days trading horizon AIM Industrial is expected to generate 4.42 times less return on investment than Amata Summit. But when comparing it to its historical volatility, AIM Industrial Growth is 2.33 times less risky than Amata Summit. It trades about 0.04 of its potential returns per unit of risk. Amata Summit Growth is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  580.00  in Amata Summit Growth on April 24, 2025 and sell it today you would earn a total of  30.00  from holding Amata Summit Growth or generate 5.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

AIM Industrial Growth  vs.  Amata Summit Growth

 Performance 
       Timeline  
AIM Industrial Growth 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in AIM Industrial Growth are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, AIM Industrial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Amata Summit Growth 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Amata Summit Growth are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Amata Summit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AIM Industrial and Amata Summit Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AIM Industrial and Amata Summit

The main advantage of trading using opposite AIM Industrial and Amata Summit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM Industrial position performs unexpectedly, Amata Summit 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 Amata Summit will offset losses from the drop in Amata Summit's long position.
The idea behind AIM Industrial Growth and Amata Summit Growth 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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