Correlation Between Comerica and Aberdeen Diversified
Can any of the company-specific risk be diversified away by investing in both Comerica and Aberdeen Diversified 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 Comerica and Aberdeen Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Aberdeen Diversified Income, you can compare the effects of market volatilities on Comerica and Aberdeen Diversified 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 Comerica with a short position of Aberdeen Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Aberdeen Diversified.
Diversification Opportunities for Comerica and Aberdeen Diversified
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Comerica and Aberdeen is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Aberdeen Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Diversified and Comerica 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 Comerica are associated (or correlated) with Aberdeen Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Diversified has no effect on the direction of Comerica i.e., Comerica and Aberdeen Diversified go up and down completely randomly.
Pair Corralation between Comerica and Aberdeen Diversified
Assuming the 90 days trading horizon Comerica is expected to generate 1.47 times more return on investment than Aberdeen Diversified. However, Comerica is 1.47 times more volatile than Aberdeen Diversified Income. It trades about 0.05 of its potential returns per unit of risk. Aberdeen Diversified Income is currently generating about 0.02 per unit of risk. If you would invest 4,892 in Comerica on September 12, 2024 and sell it today you would earn a total of 1,814 from holding Comerica or generate 37.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.46% |
| Values | Daily Returns |
Comerica vs. Aberdeen Diversified Income
Performance |
| Timeline |
| Comerica |
| Aberdeen Diversified |
Comerica and Aberdeen Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and Aberdeen Diversified
The main advantage of trading using opposite Comerica and Aberdeen Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, Aberdeen Diversified 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 Aberdeen Diversified will offset losses from the drop in Aberdeen Diversified's long position.| Comerica vs. Aberdeen Diversified Income | Comerica vs. Herald Investment Trust | Comerica vs. Bankers Investment Trust | Comerica vs. Kinnevik Investment AB |
| Aberdeen Diversified vs. Future Metals NL | Aberdeen Diversified vs. Automatic Data Processing | Aberdeen Diversified vs. Empire Metals Limited | Aberdeen Diversified vs. Air Products Chemicals |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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