Correlation Between Ab Global and Aberdeen
Can any of the company-specific risk be diversified away by investing in both Ab Global and Aberdeen 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 Ab Global and Aberdeen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Bond and Aberdeen Equity A, you can compare the effects of market volatilities on Ab Global and Aberdeen 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 Ab Global with a short position of Aberdeen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Aberdeen.
Diversification Opportunities for Ab Global and Aberdeen
Excellent diversification
The 3 months correlation between ANAZX and Aberdeen is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Aberdeen Equity A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Equity A and Ab 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 Ab Global Bond are associated (or correlated) with Aberdeen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Equity A has no effect on the direction of Ab Global i.e., Ab Global and Aberdeen go up and down completely randomly.
Pair Corralation between Ab Global and Aberdeen
Assuming the 90 days horizon Ab Global is expected to generate 1.95 times less return on investment than Aberdeen. But when comparing it to its historical volatility, Ab Global Bond is 3.41 times less risky than Aberdeen. It trades about 0.12 of its potential returns per unit of risk. Aberdeen Equity A is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,162 in Aberdeen Equity A on September 1, 2024 and sell it today you would earn a total of 82.00 from holding Aberdeen Equity A or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Ab Global Bond vs. Aberdeen Equity A
Performance |
| Timeline |
| Ab Global Bond |
| Aberdeen Equity A |
Ab Global and Aberdeen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Aberdeen
The main advantage of trading using opposite Ab Global and Aberdeen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Aberdeen 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 will offset losses from the drop in Aberdeen's long position.| Ab Global vs. Dodge Cox Stock | Ab Global vs. Fidelity Series 1000 | Ab Global vs. Qs Large Cap | Ab Global vs. Aqr Large Cap |
| Aberdeen vs. Aberdeen Emerging Markets | Aberdeen vs. Aberdeen Emerging Markets | Aberdeen vs. Aberdeen Emerging Markets | Aberdeen vs. Aberdeen Gbl Eq |
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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