Correlation Between Impact Growth and AIM Industrial

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

By analyzing existing cross correlation between Impact Growth REIT and AIM Industrial Growth, you can compare the effects of market volatilities on Impact Growth and AIM Industrial 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 Impact Growth with a short position of AIM Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impact Growth and AIM Industrial.

Diversification Opportunities for Impact Growth and AIM Industrial

0.44

Correlation Coefficient

Impact Growth  AIM Industrial

Very weak diversification

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

Pair Corralation between Impact Growth and AIM Industrial

Assuming the 90 days trading horizon Impact Growth REIT is expected to generate 2.56 times more return on investment than AIM Industrial. However, Impact Growth is 2.56 times more volatile than AIM Industrial Growth. It trades about 0.06 of its potential returns per unit of risk. AIM Industrial Growth is currently generating about 0.04 per unit of risk. If you would invest  924.00  in Impact Growth REIT on April 20, 2025 and sell it today you would earn a total of  36.00  from holding Impact Growth REIT or generate 3.9% return on investment over 90 days.

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

Impact Growth REIT  vs.  AIM Industrial Growth

Impact Growth REIT

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Impact Growth REIT are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Impact Growth is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

AIM Industrial Growth

Risk-Adjusted Performance

Insignificant

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.

Pair Trading with Impact Growth and AIM Industrial

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

The idea behind Impact Growth REIT and AIM Industrial 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.