Correlation Between Aberdeen Standard and Western Asset
Can any of the company-specific risk be diversified away by investing in both Aberdeen Standard and Western Asset 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 Western Asset 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 Western Asset Claymore, you can compare the effects of market volatilities on Aberdeen Standard and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Standard and Western Asset.
Diversification Opportunities for Aberdeen Standard and Western Asset
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aberdeen and Western is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Standard Global and Western Asset Claymore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Claymore 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Claymore has no effect on the direction of Aberdeen Standard i.e., Aberdeen Standard and Western Asset go up and down completely randomly.
Pair Corralation between Aberdeen Standard and Western Asset
Given the investment horizon of 90 days Aberdeen Standard is expected to generate 1.32 times less return on investment than Western Asset. In addition to that, Aberdeen Standard is 1.96 times more volatile than Western Asset Claymore. It trades about 0.16 of its total potential returns per unit of risk. Western Asset Claymore is currently generating about 0.42 per unit of volatility. If you would invest 822.00 in Western Asset Claymore on November 4, 2024 and sell it today you would earn a total of 37.00 from holding Western Asset Claymore or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Standard Global vs. Western Asset Claymore
Performance |
| Timeline |
| Aberdeen Standard Global |
| Western Asset Claymore |
Aberdeen Standard and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Standard and Western Asset
The main advantage of trading using opposite Aberdeen Standard and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Standard position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. The Gabelli Equity | Western Asset vs. Eaton Vance National | Western Asset vs. Structured Products Corp | Western Asset vs. Aberdeen Standard Global |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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