Correlation Between Aberforth Smaller and Burberry Group
Can any of the company-specific risk be diversified away by investing in both Aberforth Smaller and Burberry Group 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 Aberforth Smaller and Burberry Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberforth Smaller Companies and Burberry Group PLC, you can compare the effects of market volatilities on Aberforth Smaller and Burberry Group 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 Aberforth Smaller with a short position of Burberry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberforth Smaller and Burberry Group.
Diversification Opportunities for Aberforth Smaller and Burberry Group
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aberforth and Burberry is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aberforth Smaller Companies and Burberry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burberry Group PLC and Aberforth Smaller 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 Aberforth Smaller Companies are associated (or correlated) with Burberry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burberry Group PLC has no effect on the direction of Aberforth Smaller i.e., Aberforth Smaller and Burberry Group go up and down completely randomly.
Pair Corralation between Aberforth Smaller and Burberry Group
Assuming the 90 days trading horizon Aberforth Smaller Companies is expected to generate 0.3 times more return on investment than Burberry Group. However, Aberforth Smaller Companies is 3.32 times less risky than Burberry Group. It trades about 0.07 of its potential returns per unit of risk. Burberry Group PLC is currently generating about -0.04 per unit of risk. If you would invest 128,088 in Aberforth Smaller Companies on August 27, 2024 and sell it today you would earn a total of 16,112 from holding Aberforth Smaller Companies or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberforth Smaller Companies vs. Burberry Group PLC
Performance |
| Timeline |
| Aberforth Smaller |
| Burberry Group PLC |
Aberforth Smaller and Burberry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberforth Smaller and Burberry Group
The main advantage of trading using opposite Aberforth Smaller and Burberry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberforth Smaller position performs unexpectedly, Burberry Group 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 Burberry Group will offset losses from the drop in Burberry Group's long position.| Aberforth Smaller vs. Catalyst Media Group | Aberforth Smaller vs. Oncimmune Holdings plc | Aberforth Smaller vs. Invesco Health Care | Aberforth Smaller vs. Coor Service Management |
| Burberry Group vs. Wheaton Precious Metals | Burberry Group vs. Tyson Foods Cl | Burberry Group vs. Cornish Metals | Burberry Group vs. Hochschild Mining plc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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