Correlation Between Abrdn Emerging and NXG NextGen
Can any of the company-specific risk be diversified away by investing in both Abrdn Emerging and NXG NextGen 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 NXG NextGen 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 NXG NextGen Infrastructure, you can compare the effects of market volatilities on Abrdn Emerging and NXG NextGen 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 NXG NextGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Emerging and NXG NextGen.
Diversification Opportunities for Abrdn Emerging and NXG NextGen
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Abrdn and NXG is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Abrdn Emerging Markets and NXG NextGen Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXG NextGen Infrastr 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 NXG NextGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXG NextGen Infrastr has no effect on the direction of Abrdn Emerging i.e., Abrdn Emerging and NXG NextGen go up and down completely randomly.
Pair Corralation between Abrdn Emerging and NXG NextGen
Considering the 90-day investment horizon Abrdn Emerging Markets is expected to under-perform the NXG NextGen. But the stock apears to be less risky and, when comparing its historical volatility, Abrdn Emerging Markets is 1.04 times less risky than NXG NextGen. The stock trades about -0.18 of its potential returns per unit of risk. The NXG NextGen Infrastructure is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest 4,350 in NXG NextGen Infrastructure on August 28, 2024 and sell it today you would earn a total of 647.00 from holding NXG NextGen Infrastructure or generate 14.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Abrdn Emerging Markets vs. NXG NextGen Infrastructure
Performance |
| Timeline |
| Abrdn Emerging Markets |
| NXG NextGen Infrastr |
Abrdn Emerging and NXG NextGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abrdn Emerging and NXG NextGen
The main advantage of trading using opposite Abrdn Emerging and NXG NextGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Emerging position performs unexpectedly, NXG NextGen 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 NXG NextGen will offset losses from the drop in NXG NextGen'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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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