Correlation Between Aberdeen Short and Aberdeen China
Can any of the company-specific risk be diversified away by investing in both Aberdeen Short and Aberdeen China 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 China 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 China Oppty, you can compare the effects of market volatilities on Aberdeen Short and Aberdeen China 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 China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Short and Aberdeen China.
Diversification Opportunities for Aberdeen Short and Aberdeen China
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aberdeen and Aberdeen is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Short Duration and Aberdeen China Oppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen China Oppty 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 China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen China Oppty has no effect on the direction of Aberdeen Short i.e., Aberdeen Short and Aberdeen China go up and down completely randomly.
Pair Corralation between Aberdeen Short and Aberdeen China
Assuming the 90 days horizon Aberdeen Short Duration is expected to generate 0.1 times more return on investment than Aberdeen China. However, Aberdeen Short Duration is 9.91 times less risky than Aberdeen China. It trades about 0.25 of its potential returns per unit of risk. Aberdeen China Oppty is currently generating about -0.09 per unit of risk. If you would invest 916.00 in Aberdeen Short Duration on August 30, 2024 and sell it today you would earn a total of 10.00 from holding Aberdeen Short Duration or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Short Duration vs. Aberdeen China Oppty
Performance |
| Timeline |
| Aberdeen Short Duration |
| Aberdeen China Oppty |
Aberdeen Short and Aberdeen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Short and Aberdeen China
The main advantage of trading using opposite Aberdeen Short and Aberdeen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Short position performs unexpectedly, Aberdeen China 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 China will offset losses from the drop in Aberdeen China's long position.| Aberdeen Short vs. Lord Abbett Diversified | Aberdeen Short vs. Tax Managed Mid Small | Aberdeen Short vs. Davenport Small Cap | Aberdeen Short vs. Tiaa Cref Small Cap Blend |
| Aberdeen China vs. Artisan Small Cap | Aberdeen China vs. Champlain Mid Cap | Aberdeen China vs. Small Midcap Dividend Income | Aberdeen China vs. Growth Fund Of |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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