Correlation Between Aberdeen Diversified and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Aberdeen Diversified and Supermarket Income 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 Supermarket Income 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 Supermarket Income REIT, you can compare the effects of market volatilities on Aberdeen Diversified and Supermarket Income 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 Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Diversified and Supermarket Income.
Diversification Opportunities for Aberdeen Diversified and Supermarket Income
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aberdeen and Supermarket is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Diversified Income and Supermarket Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supermarket Income REIT 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 Supermarket Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supermarket Income REIT has no effect on the direction of Aberdeen Diversified i.e., Aberdeen Diversified and Supermarket Income go up and down completely randomly.
Pair Corralation between Aberdeen Diversified and Supermarket Income
Assuming the 90 days trading horizon Aberdeen Diversified Income is expected to generate 0.71 times more return on investment than Supermarket Income. However, Aberdeen Diversified Income is 1.4 times less risky than Supermarket Income. It trades about 0.18 of its potential returns per unit of risk. Supermarket Income REIT is currently generating about -0.3 per unit of risk. If you would invest 4,300 in Aberdeen Diversified Income on October 13, 2024 and sell it today you would earn a total of 120.00 from holding Aberdeen Diversified Income or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Diversified Income vs. Supermarket Income REIT
Performance |
| Timeline |
| Aberdeen Diversified |
| Supermarket Income REIT |
Aberdeen Diversified and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Diversified and Supermarket Income
The main advantage of trading using opposite Aberdeen Diversified and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Diversified position performs unexpectedly, Supermarket Income 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 Supermarket Income will offset losses from the drop in Supermarket Income's long position.| Aberdeen Diversified vs. BH Macro Limited | Aberdeen Diversified vs. Intermediate Capital Group | Aberdeen Diversified vs. FC Investment Trust | Aberdeen Diversified vs. Polar Capital Technology |
| Supermarket Income vs. Impax Asset Management | Supermarket Income vs. Bankers Investment Trust | Supermarket Income vs. Zegona Communications Plc | Supermarket Income vs. Deltex Medical Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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