Correlation Between Abrdn Em and Aberdeen Emerging
Can any of the company-specific risk be diversified away by investing in both Abrdn Em and Aberdeen 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 Abrdn Em and Aberdeen Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abrdn Em Sma and Aberdeen Emerging Markets, you can compare the effects of market volatilities on Abrdn Em and Aberdeen 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 Abrdn Em with a short position of Aberdeen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Em and Aberdeen Emerging.
Diversification Opportunities for Abrdn Em and Aberdeen Emerging
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Abrdn and Aberdeen is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Abrdn Em Sma and Aberdeen Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Emerging Markets and Abrdn Em 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 Abrdn Em Sma are associated (or correlated) with Aberdeen Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Emerging Markets has no effect on the direction of Abrdn Em i.e., Abrdn Em and Aberdeen Emerging go up and down completely randomly.
Pair Corralation between Abrdn Em and Aberdeen Emerging
Assuming the 90 days horizon Abrdn Em is expected to generate 12.05 times less return on investment than Aberdeen Emerging. But when comparing it to its historical volatility, Abrdn Em Sma is 1.18 times less risky than Aberdeen Emerging. It trades about 0.01 of its potential returns per unit of risk. Aberdeen Emerging Markets is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,342 in Aberdeen Emerging Markets on November 9, 2024 and sell it today you would earn a total of 28.00 from holding Aberdeen Emerging Markets or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abrdn Em Sma vs. Aberdeen Emerging Markets
Performance |
| Timeline |
| Abrdn Em Sma |
| Aberdeen Emerging Markets |
Abrdn Em and Aberdeen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abrdn Em and Aberdeen Emerging
The main advantage of trading using opposite Abrdn Em and Aberdeen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Em position performs unexpectedly, Aberdeen 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 Aberdeen Emerging will offset losses from the drop in Aberdeen Emerging's long position.| Abrdn Em vs. T Rowe Price | Abrdn Em vs. Transamerica Funds | Abrdn Em vs. Blrc Sgy Mnp | Abrdn Em vs. Touchstone Funds Group |
| Aberdeen Emerging vs. Financials Ultrasector Profund | Aberdeen Emerging vs. Prudential Financial Services | Aberdeen Emerging vs. 1919 Financial Services | Aberdeen Emerging vs. Gabelli Global Financial |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |