Correlation Between Aberdeen Diversified and Fair Oaks
Can any of the company-specific risk be diversified away by investing in both Aberdeen Diversified and Fair Oaks 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 Fair Oaks 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 Fair Oaks Income, you can compare the effects of market volatilities on Aberdeen Diversified and Fair Oaks 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 Fair Oaks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Diversified and Fair Oaks.
Diversification Opportunities for Aberdeen Diversified and Fair Oaks
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aberdeen and Fair is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Diversified Income and Fair Oaks Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Oaks Income 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 Fair Oaks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Oaks Income has no effect on the direction of Aberdeen Diversified i.e., Aberdeen Diversified and Fair Oaks go up and down completely randomly.
Pair Corralation between Aberdeen Diversified and Fair Oaks
Assuming the 90 days trading horizon Aberdeen Diversified Income is expected to under-perform the Fair Oaks. In addition to that, Aberdeen Diversified is 1.47 times more volatile than Fair Oaks Income. It trades about -0.1 of its total potential returns per unit of risk. Fair Oaks Income is currently generating about 0.1 per unit of volatility. If you would invest 55.00 in Fair Oaks Income on November 5, 2024 and sell it today you would earn a total of 1.00 from holding Fair Oaks Income or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Diversified Income vs. Fair Oaks Income
Performance |
| Timeline |
| Aberdeen Diversified |
| Fair Oaks Income |
Aberdeen Diversified and Fair Oaks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Diversified and Fair Oaks
The main advantage of trading using opposite Aberdeen Diversified and Fair Oaks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Diversified position performs unexpectedly, Fair Oaks 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 Fair Oaks will offset losses from the drop in Fair Oaks' long position.| Aberdeen Diversified vs. Hilton Food Group | Aberdeen Diversified vs. Wyndham Hotels Resorts | Aberdeen Diversified vs. MTI Wireless Edge | Aberdeen Diversified vs. Infrastrutture Wireless Italiane |
| Fair Oaks vs. Spirent Communications plc | Fair Oaks vs. Roebuck Food Group | Fair Oaks vs. Universal Display Corp | Fair Oaks vs. MTI Wireless Edge |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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