Correlation Between Aberdeen Global and FF European
Can any of the company-specific risk be diversified away by investing in both Aberdeen Global and FF European 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 FF European 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 FF European, you can compare the effects of market volatilities on Aberdeen Global and FF European 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 FF European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Global and FF European.
Diversification Opportunities for Aberdeen Global and FF European
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aberdeen and FJ2B is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Asian and FF European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FF European 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 FF European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FF European has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and FF European go up and down completely randomly.
Pair Corralation between Aberdeen Global and FF European
Assuming the 90 days trading horizon Aberdeen Global Asian is expected to generate 1.23 times more return on investment than FF European. However, Aberdeen Global is 1.23 times more volatile than FF European. It trades about 0.15 of its potential returns per unit of risk. FF European is currently generating about -0.1 per unit of risk. If you would invest 5,555 in Aberdeen Global Asian on October 11, 2024 and sell it today you would earn a total of 128.00 from holding Aberdeen Global Asian or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Global Asian vs. FF European
Performance |
| Timeline |
| Aberdeen Global Asian |
| FF European |
Aberdeen Global and FF European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Global and FF European
The main advantage of trading using opposite Aberdeen Global and FF European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Global position performs unexpectedly, FF European 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 FF European will offset losses from the drop in FF European's long position.| Aberdeen Global vs. Azvalor Global Value | Aberdeen Global vs. JPM Global Natural | Aberdeen Global vs. BGF Global Allocation | Aberdeen Global vs. Cobas Global PP |
| FF European vs. Esfera Robotics R | FF European vs. R co Valor F | FF European vs. CM AM Monplus NE | FF European vs. IE00B0H4TS55 |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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