Correlation Between Ab Value and Aberdeen Emerging
Can any of the company-specific risk be diversified away by investing in both Ab Value 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 Ab Value and Aberdeen Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Value Fund and Aberdeen Emerging Markets, you can compare the effects of market volatilities on Ab Value 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 Ab Value with a short position of Aberdeen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and Aberdeen Emerging.
Diversification Opportunities for Ab Value and Aberdeen Emerging
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABVCX and Aberdeen is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund 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 Ab Value 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 Ab Value Fund 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 Ab Value i.e., Ab Value and Aberdeen Emerging go up and down completely randomly.
Pair Corralation between Ab Value and Aberdeen Emerging
Assuming the 90 days horizon Ab Value Fund is expected to generate 0.87 times more return on investment than Aberdeen Emerging. However, Ab Value Fund is 1.15 times less risky than Aberdeen Emerging. It trades about 0.08 of its potential returns per unit of risk. Aberdeen Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 1,467 in Ab Value Fund on September 14, 2024 and sell it today you would earn a total of 536.00 from holding Ab Value Fund or generate 36.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Value Fund vs. Aberdeen Emerging Markets
Performance |
| Timeline |
| Ab Value Fund |
| Aberdeen Emerging Markets |
Ab Value and Aberdeen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Value and Aberdeen Emerging
The main advantage of trading using opposite Ab Value and Aberdeen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Value 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.| Ab Value vs. Putnam Convertible Incm Gwth | Ab Value vs. Fidelity Sai Convertible | Ab Value vs. Calamos Dynamic Convertible | Ab Value vs. Advent Claymore Convertible |
| Aberdeen Emerging vs. Balanced Fund Investor | Aberdeen Emerging vs. Multimedia Portfolio Multimedia | Aberdeen Emerging vs. Ab Value Fund | Aberdeen Emerging vs. Ab Small Cap |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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