Correlation Between AES and Dimensional 2070

Can any of the company-specific risk be diversified away by investing in both AES and Dimensional 2070 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 AES and Dimensional 2070 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The AES and Dimensional 2070 Target, you can compare the effects of market volatilities on AES and Dimensional 2070 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 AES with a short position of Dimensional 2070. Check out your portfolio center. Please also check ongoing floating volatility patterns of AES and Dimensional 2070.

Diversification Opportunities for AES and Dimensional 2070

0.9

Correlation Coefficient

AES  Dimensional 2070

Almost no diversification

The 3 months correlation between AES and Dimensional is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding The AES and Dimensional 2070 Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional 2070 Target and AES 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 The AES are associated (or correlated) with Dimensional 2070. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional 2070 Target has no effect on the direction of AES i.e., AES and Dimensional 2070 go up and down completely randomly.

Pair Corralation between AES and Dimensional 2070

Considering the 90-day investment horizon The AES is expected to generate 6.6 times more return on investment than Dimensional 2070. However, AES is 6.6 times more volatile than Dimensional 2070 Target. It trades about 0.16 of its potential returns per unit of risk. Dimensional 2070 Target is currently generating about 0.22 per unit of risk. If you would invest  994.00  in The AES on May 24, 2025 and sell it today you would earn a total of  355.00  from holding The AES or generate 35.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

The AES  vs.  Dimensional 2070 Target

AES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The AES are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, AES unveiled solid returns over the last few months and may actually be approaching a breakup point.

Dimensional 2070 Target

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional 2070 Target are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Dimensional 2070 may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with AES and Dimensional 2070

The main advantage of trading using opposite AES and Dimensional 2070 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AES position performs unexpectedly, Dimensional 2070 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 Dimensional 2070 will offset losses from the drop in Dimensional 2070's long position.

The idea behind The AES and Dimensional 2070 Target 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.