Correlation Between Aberdeen Global and Abrdn Emerging
Can any of the company-specific risk be diversified away by investing in both Aberdeen Global and Abrdn Emerging 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 Global and Abrdn Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Global Dynamic and Abrdn Emerging Markets, you can compare the effects of market volatilities on Aberdeen Global and Abrdn Emerging 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 Global with a short position of Abrdn Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Global and Abrdn Emerging.
Diversification Opportunities for Aberdeen Global and Abrdn Emerging
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aberdeen and Abrdn is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Dynamic and Abrdn Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abrdn Emerging Markets and Aberdeen Global 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 Global Dynamic are associated (or correlated) with Abrdn Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abrdn Emerging Markets has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and Abrdn Emerging go up and down completely randomly.
Pair Corralation between Aberdeen Global and Abrdn Emerging
Considering the 90-day investment horizon Aberdeen Global Dynamic is expected to generate 0.55 times more return on investment than Abrdn Emerging. However, Aberdeen Global Dynamic is 1.83 times less risky than Abrdn Emerging. It trades about -0.04 of its potential returns per unit of risk. Abrdn Emerging Markets is currently generating about -0.19 per unit of risk. If you would invest 1,023 in Aberdeen Global Dynamic on August 29, 2024 and sell it today you would lose (6.00) from holding Aberdeen Global Dynamic or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Global Dynamic vs. Abrdn Emerging Markets
Performance |
| Timeline |
| Aberdeen Global Dynamic |
| Abrdn Emerging Markets |
Aberdeen Global and Abrdn Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Global and Abrdn Emerging
The main advantage of trading using opposite Aberdeen Global and Abrdn Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Global position performs unexpectedly, Abrdn Emerging 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 Abrdn Emerging will offset losses from the drop in Abrdn Emerging's long position.| Aberdeen Global vs. Allianzgi Convertible Income | Aberdeen Global vs. MFS Investment Grade | Aberdeen Global vs. Eaton Vance Senior | Aberdeen Global vs. Stone Harbor Emerging |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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