Correlation Between Aberdeen Total and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Aberdeen Total and Dow Jones 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 Total and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Total Dynamic and Dow Jones Industrial, you can compare the effects of market volatilities on Aberdeen Total and Dow Jones 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 Total with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Total and Dow Jones.
Diversification Opportunities for Aberdeen Total and Dow Jones
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aberdeen and Dow is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Total Dynamic and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Aberdeen Total 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 Total Dynamic are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Aberdeen Total i.e., Aberdeen Total and Dow Jones go up and down completely randomly.
Pair Corralation between Aberdeen Total and Dow Jones
Considering the 90-day investment horizon Aberdeen Total Dynamic is expected to generate 0.78 times more return on investment than Dow Jones. However, Aberdeen Total Dynamic is 1.28 times less risky than Dow Jones. It trades about 0.24 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.17 per unit of risk. If you would invest 849.00 in Aberdeen Total Dynamic on October 24, 2024 and sell it today you would earn a total of 23.00 from holding Aberdeen Total Dynamic or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Aberdeen Total Dynamic vs. Dow Jones Industrial
Performance |
| Timeline |
Aberdeen Total and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Aberdeen Total Dynamic
Pair trading matchups for Aberdeen Total
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Aberdeen Total and Dow Jones
The main advantage of trading using opposite Aberdeen Total and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Total position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Aberdeen Total vs. Aberdeen Global Premier | Aberdeen Total vs. Alliancebernstein National Municipal | Aberdeen Total vs. Aberdeen Standard Global | Aberdeen Total vs. Aberdeen Global Dynamic |
| Dow Jones vs. Transocean | Dow Jones vs. Noble plc | Dow Jones vs. Evolution Gaming Group | Dow Jones vs. Addus HomeCare |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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