Correlation Between Aberdeen Diversified and MOL Hungarian
Can any of the company-specific risk be diversified away by investing in both Aberdeen Diversified and MOL Hungarian 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 Diversified and MOL Hungarian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Diversified Income and MOL Hungarian Oil, you can compare the effects of market volatilities on Aberdeen Diversified and MOL Hungarian 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 Diversified with a short position of MOL Hungarian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Diversified and MOL Hungarian.
Diversification Opportunities for Aberdeen Diversified and MOL Hungarian
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aberdeen and MOL is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Diversified Income and MOL Hungarian Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Hungarian Oil and Aberdeen Diversified 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 Diversified Income are associated (or correlated) with MOL Hungarian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL Hungarian Oil has no effect on the direction of Aberdeen Diversified i.e., Aberdeen Diversified and MOL Hungarian go up and down completely randomly.
Pair Corralation between Aberdeen Diversified and MOL Hungarian
Assuming the 90 days trading horizon Aberdeen Diversified Income is expected to generate 0.84 times more return on investment than MOL Hungarian. However, Aberdeen Diversified Income is 1.19 times less risky than MOL Hungarian. It trades about 0.05 of its potential returns per unit of risk. MOL Hungarian Oil is currently generating about 0.01 per unit of risk. If you would invest 4,200 in Aberdeen Diversified Income on September 13, 2024 and sell it today you would earn a total of 100.00 from holding Aberdeen Diversified Income or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Diversified Income vs. MOL Hungarian Oil
Performance |
| Timeline |
| Aberdeen Diversified |
| MOL Hungarian Oil |
Aberdeen Diversified and MOL Hungarian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Diversified and MOL Hungarian
The main advantage of trading using opposite Aberdeen Diversified and MOL Hungarian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Diversified position performs unexpectedly, MOL Hungarian 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 MOL Hungarian will offset losses from the drop in MOL Hungarian's long position.| Aberdeen Diversified vs. CATCo Reinsurance Opportunities | Aberdeen Diversified vs. BH Macro Limited | Aberdeen Diversified vs. Legal General Group | Aberdeen Diversified vs. TMT Investments PLC |
| MOL Hungarian vs. Samsung Electronics Co | MOL Hungarian vs. Samsung Electronics Co | MOL Hungarian vs. Hyundai Motor | MOL Hungarian vs. Reliance Industries Ltd |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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