Correlation Between Aberden Emerng and Aberdeen China
Can any of the company-specific risk be diversified away by investing in both Aberden Emerng and Aberdeen China 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 Aberden Emerng and Aberdeen China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberden Emerng Mrkts and Aberdeen China Oppty, you can compare the effects of market volatilities on Aberden Emerng and Aberdeen China 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 Aberden Emerng with a short position of Aberdeen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberden Emerng and Aberdeen China.
Diversification Opportunities for Aberden Emerng and Aberdeen China
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aberden and Aberdeen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Aberden Emerng Mrkts and Aberdeen China Oppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen China Oppty and Aberden Emerng 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 Aberden Emerng Mrkts are associated (or correlated) with Aberdeen China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen China Oppty has no effect on the direction of Aberden Emerng i.e., Aberden Emerng and Aberdeen China go up and down completely randomly.
Pair Corralation between Aberden Emerng and Aberdeen China
Assuming the 90 days horizon Aberden Emerng Mrkts is expected to generate 0.47 times more return on investment than Aberdeen China. However, Aberden Emerng Mrkts is 2.12 times less risky than Aberdeen China. It trades about -0.18 of its potential returns per unit of risk. Aberdeen China Oppty is currently generating about -0.09 per unit of risk. If you would invest 1,431 in Aberden Emerng Mrkts on August 30, 2024 and sell it today you would lose (52.00) from holding Aberden Emerng Mrkts or give up 3.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberden Emerng Mrkts vs. Aberdeen China Oppty
Performance |
| Timeline |
| Aberden Emerng Mrkts |
| Aberdeen China Oppty |
Aberden Emerng and Aberdeen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberden Emerng and Aberdeen China
The main advantage of trading using opposite Aberden Emerng and Aberdeen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberden Emerng position performs unexpectedly, Aberdeen China 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 Aberdeen China will offset losses from the drop in Aberdeen China's long position.| Aberden Emerng vs. Hartford Healthcare Hls | Aberden Emerng vs. Invesco Global Health | Aberden Emerng vs. Lord Abbett Health | Aberden Emerng vs. Tekla Healthcare Opportunities |
| Aberdeen China vs. Artisan Small Cap | Aberdeen China vs. Champlain Mid Cap | Aberdeen China vs. Small Midcap Dividend Income | Aberdeen China vs. Growth Fund Of |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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