Correlation Between Aberdeen Global and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Aberdeen Global and Templeton Global 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 Templeton Global 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 Templeton Global AD, you can compare the effects of market volatilities on Aberdeen Global and Templeton Global 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 Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Global and Templeton Global.
Diversification Opportunities for Aberdeen Global and Templeton Global
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aberdeen and Templeton is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Asian and Templeton Global AD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton 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 Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and Templeton Global go up and down completely randomly.
Pair Corralation between Aberdeen Global and Templeton Global
Assuming the 90 days trading horizon Aberdeen Global Asian is expected to generate 0.99 times more return on investment than Templeton Global. However, Aberdeen Global Asian is 1.01 times less risky than Templeton Global. It trades about 0.22 of its potential returns per unit of risk. Templeton Global AD is currently generating about 0.09 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. Templeton Global AD
Performance |
| Timeline |
| Aberdeen Global Asian |
| Templeton Global |
Aberdeen Global and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Global and Templeton Global
The main advantage of trading using opposite Aberdeen Global and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Global position performs unexpectedly, Templeton Global 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 Templeton Global will offset losses from the drop in Templeton Global'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 |
| Templeton Global vs. Azvalor Global Value | Templeton Global vs. JPM Global Natural | Templeton Global vs. Cobas Global PP | Templeton Global vs. Aberdeen Global Asian |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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