Correlation Between Aberdeen International and Bimini Capital
Can any of the company-specific risk be diversified away by investing in both Aberdeen International and Bimini Capital 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 Aberdeen International and Bimini Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen International and Bimini Capital Management, you can compare the effects of market volatilities on Aberdeen International and Bimini Capital 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 Aberdeen International with a short position of Bimini Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen International and Bimini Capital.
Diversification Opportunities for Aberdeen International and Bimini Capital
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aberdeen and Bimini is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen International and Bimini Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bimini Capital Management and Aberdeen International 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 Aberdeen International are associated (or correlated) with Bimini Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bimini Capital Management has no effect on the direction of Aberdeen International i.e., Aberdeen International and Bimini Capital go up and down completely randomly.
Pair Corralation between Aberdeen International and Bimini Capital
Assuming the 90 days horizon Aberdeen International is expected to generate 2.02 times more return on investment than Bimini Capital. However, Aberdeen International is 2.02 times more volatile than Bimini Capital Management. It trades about 0.12 of its potential returns per unit of risk. Bimini Capital Management is currently generating about 0.21 per unit of risk. If you would invest 3.00 in Aberdeen International on August 29, 2024 and sell it today you would earn a total of 0.60 from holding Aberdeen International or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen International vs. Bimini Capital Management
Performance |
| Timeline |
| Aberdeen International |
| Bimini Capital Management |
Aberdeen International and Bimini Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen International and Bimini Capital
The main advantage of trading using opposite Aberdeen International and Bimini Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen International position performs unexpectedly, Bimini Capital 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 Bimini Capital will offset losses from the drop in Bimini Capital's long position.| Aberdeen International vs. Invesco High Income | Aberdeen International vs. Blackrock Muniholdings Ny | Aberdeen International vs. MFS Investment Grade | Aberdeen International vs. Federated Premier Municipal |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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