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
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Abrdn and Aberdeen is 0.91. 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 Sma is expected to generate 0.98 times more return on investment than Aberdeen Emerging. However, Abrdn Em Sma is 1.02 times less risky than Aberdeen Emerging. It trades about -0.07 of its potential returns per unit of risk. Aberdeen Emerging Markets is currently generating about -0.19 per unit of risk. If you would invest 878.00 in Abrdn Em Sma on August 26, 2024 and sell it today you would lose (12.00) from holding Abrdn Em Sma or give up 1.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| 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. Aberdeen Emerging Markets | Abrdn Em vs. Aberdeen Emerging Markets | Abrdn Em vs. Aberdeen Emerging Markets | Abrdn Em vs. Aberdeen Gbl Eq |
| Aberdeen Emerging vs. Aberdeen Emerging Markets | Aberdeen Emerging vs. Aberdeen Emerging Markets | Aberdeen Emerging vs. Aberdeen Gbl Eq | Aberdeen Emerging 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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