Correlation Between Aberdeen Short and Aberdeen Emerging
Can any of the company-specific risk be diversified away by investing in both Aberdeen Short and Aberdeen Emerging 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 Short and Aberdeen Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Short Duration and Aberdeen Emerging Markets, you can compare the effects of market volatilities on Aberdeen Short and Aberdeen Emerging 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 Short with a short position of Aberdeen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Short and Aberdeen Emerging.
Diversification Opportunities for Aberdeen Short and Aberdeen Emerging
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aberdeen and Aberdeen is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Short Duration and Aberdeen Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Emerging Markets and Aberdeen Short 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 Short Duration are associated (or correlated) with Aberdeen Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Emerging Markets has no effect on the direction of Aberdeen Short i.e., Aberdeen Short and Aberdeen Emerging go up and down completely randomly.
Pair Corralation between Aberdeen Short and Aberdeen Emerging
Assuming the 90 days horizon Aberdeen Short Duration is expected to generate 0.16 times more return on investment than Aberdeen Emerging. However, Aberdeen Short Duration is 6.39 times less risky than Aberdeen Emerging. It trades about 0.18 of its potential returns per unit of risk. Aberdeen Emerging Markets is currently generating about 0.02 per unit of risk. If you would invest 894.00 in Aberdeen Short Duration on September 1, 2024 and sell it today you would earn a total of 33.00 from holding Aberdeen Short Duration or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Short Duration vs. Aberdeen Emerging Markets
Performance |
| Timeline |
| Aberdeen Short Duration |
| Aberdeen Emerging Markets |
Aberdeen Short and Aberdeen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Short and Aberdeen Emerging
The main advantage of trading using opposite Aberdeen Short and Aberdeen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Short position performs unexpectedly, Aberdeen Emerging 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 Emerging will offset losses from the drop in Aberdeen Emerging's long position.| Aberdeen Short vs. Us Government Securities | Aberdeen Short vs. Goldman Sachs Government | Aberdeen Short vs. Virtus Seix Government | Aberdeen Short vs. Franklin Government Money |
| Aberdeen Emerging vs. Aberdeen Emerging Markets | Aberdeen Emerging vs. Aberdeen Gbl Eq | Aberdeen Emerging vs. Aberdeen Gbl Eq | Aberdeen Emerging vs. Columbia Seligman Premium |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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