Correlation Between Abrdn Emerging and Highland Floating
Can any of the company-specific risk be diversified away by investing in both Abrdn Emerging and Highland Floating 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 Abrdn Emerging and Highland Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abrdn Emerging Markets and Highland Floating Rate, you can compare the effects of market volatilities on Abrdn Emerging and Highland Floating 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 Abrdn Emerging with a short position of Highland Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Emerging and Highland Floating.
Diversification Opportunities for Abrdn Emerging and Highland Floating
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Abrdn and Highland is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Abrdn Emerging Markets and Highland Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Floating Rate and Abrdn Emerging 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 Abrdn Emerging Markets are associated (or correlated) with Highland Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Floating Rate has no effect on the direction of Abrdn Emerging i.e., Abrdn Emerging and Highland Floating go up and down completely randomly.
Pair Corralation between Abrdn Emerging and Highland Floating
Considering the 90-day investment horizon Abrdn Emerging Markets is expected to under-perform the Highland Floating. But the stock apears to be less risky and, when comparing its historical volatility, Abrdn Emerging Markets is 1.91 times less risky than Highland Floating. The stock trades about -0.12 of its potential returns per unit of risk. The Highland Floating Rate is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 566.00 in Highland Floating Rate on August 31, 2024 and sell it today you would earn a total of 22.00 from holding Highland Floating Rate or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abrdn Emerging Markets vs. Highland Floating Rate
Performance |
| Timeline |
| Abrdn Emerging Markets |
| Highland Floating Rate |
Abrdn Emerging and Highland Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abrdn Emerging and Highland Floating
The main advantage of trading using opposite Abrdn Emerging and Highland Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Emerging position performs unexpectedly, Highland Floating 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 Highland Floating will offset losses from the drop in Highland Floating's long position.| Abrdn Emerging vs. DWS Municipal Income | Abrdn Emerging vs. Blackrock Muni Intermediate | Abrdn Emerging vs. Blackrock Muniyield | Abrdn Emerging vs. Flow Capital Corp |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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