Correlation Between Aberdeen Global and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both Aberdeen Global and BNY Mellon 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 Global and BNY Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Global Asian and BNY Mellon Global, you can compare the effects of market volatilities on Aberdeen Global and BNY Mellon 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 Global with a short position of BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Global and BNY Mellon.
Diversification Opportunities for Aberdeen Global and BNY Mellon
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aberdeen and BNY is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Asian and BNY Mellon Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon Global and Aberdeen Global 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 Global Asian are associated (or correlated) with BNY Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNY Mellon Global has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and BNY Mellon go up and down completely randomly.
Pair Corralation between Aberdeen Global and BNY Mellon
Assuming the 90 days trading horizon Aberdeen Global Asian is expected to generate 2.03 times more return on investment than BNY Mellon. However, Aberdeen Global is 2.03 times more volatile than BNY Mellon Global. It trades about 0.22 of its potential returns per unit of risk. BNY Mellon Global is currently generating about 0.15 per unit of risk. If you would invest 5,395 in Aberdeen Global Asian on September 14, 2024 and sell it today you would earn a total of 193.00 from holding Aberdeen Global Asian or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Global Asian vs. BNY Mellon Global
Performance |
| Timeline |
| Aberdeen Global Asian |
| BNY Mellon Global |
Aberdeen Global and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Global and BNY Mellon
The main advantage of trading using opposite Aberdeen Global and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Global position performs unexpectedly, BNY Mellon 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 BNY Mellon will offset losses from the drop in BNY Mellon's long position.| Aberdeen Global vs. Azvalor Global Value | Aberdeen Global vs. JPM Global Natural | Aberdeen Global vs. Cobas Global PP | Aberdeen Global vs. Templeton Global AD |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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