Correlation Between Aberdeen New and Xtrackers
Can any of the company-specific risk be diversified away by investing in both Aberdeen New and Xtrackers 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 New and Xtrackers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen New India and Xtrackers Ie Plc, you can compare the effects of market volatilities on Aberdeen New and Xtrackers 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 New with a short position of Xtrackers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen New and Xtrackers.
Diversification Opportunities for Aberdeen New and Xtrackers
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aberdeen and Xtrackers is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen New India and Xtrackers Ie Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Ie Plc and Aberdeen New 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 New India are associated (or correlated) with Xtrackers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Ie Plc has no effect on the direction of Aberdeen New i.e., Aberdeen New and Xtrackers go up and down completely randomly.
Pair Corralation between Aberdeen New and Xtrackers
Assuming the 90 days trading horizon Aberdeen New India is expected to generate 1.35 times more return on investment than Xtrackers. However, Aberdeen New is 1.35 times more volatile than Xtrackers Ie Plc. It trades about 0.1 of its potential returns per unit of risk. Xtrackers Ie Plc is currently generating about 0.12 per unit of risk. If you would invest 55,200 in Aberdeen New India on August 31, 2024 and sell it today you would earn a total of 23,400 from holding Aberdeen New India or generate 42.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Aberdeen New India vs. Xtrackers Ie Plc
Performance |
| Timeline |
| Aberdeen New India |
| Xtrackers Ie Plc |
Aberdeen New and Xtrackers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen New and Xtrackers
The main advantage of trading using opposite Aberdeen New and Xtrackers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen New position performs unexpectedly, Xtrackers 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 Xtrackers will offset losses from the drop in Xtrackers' long position.| Aberdeen New vs. iShares MSCI Japan | Aberdeen New vs. Amundi EUR High | Aberdeen New vs. iShares JP Morgan | Aberdeen New vs. Xtrackers MSCI |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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