Correlation Between Aberdeen Standard and First Trust
Can any of the company-specific risk be diversified away by investing in both Aberdeen Standard and First Trust 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 Standard and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Standard Global and First Trust Energy, you can compare the effects of market volatilities on Aberdeen Standard and First Trust 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 Standard with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Standard and First Trust.
Diversification Opportunities for Aberdeen Standard and First Trust
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aberdeen and First is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Standard Global and First Trust Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Energy and Aberdeen Standard 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 Standard Global are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Energy has no effect on the direction of Aberdeen Standard i.e., Aberdeen Standard and First Trust go up and down completely randomly.
Pair Corralation between Aberdeen Standard and First Trust
If you would invest 1,564 in First Trust Energy on August 28, 2024 and sell it today you would earn a total of 0.00 from holding First Trust Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Aberdeen Standard Global vs. First Trust Energy
Performance |
| Timeline |
| Aberdeen Standard Global |
| First Trust Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aberdeen Standard and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Standard and First Trust
The main advantage of trading using opposite Aberdeen Standard and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Standard position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Aberdeen Standard vs. Blackrock Muniyield Quality | Aberdeen Standard vs. PIMCO Access Income | Aberdeen Standard vs. Nuveen Municipal Credit | Aberdeen Standard vs. Western Asset Diversified |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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