Correlation Between Aberdeen Ultra and Aberdeen Short
Can any of the company-specific risk be diversified away by investing in both Aberdeen Ultra and Aberdeen Short 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 Ultra and Aberdeen Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Ultra Short and Aberdeen Short Duration, you can compare the effects of market volatilities on Aberdeen Ultra and Aberdeen Short 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 Ultra with a short position of Aberdeen Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Ultra and Aberdeen Short.
Diversification Opportunities for Aberdeen Ultra and Aberdeen Short
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aberdeen and Aberdeen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Ultra Short and Aberdeen Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Short Duration and Aberdeen Ultra 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 Ultra Short are associated (or correlated) with Aberdeen Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Short Duration has no effect on the direction of Aberdeen Ultra i.e., Aberdeen Ultra and Aberdeen Short go up and down completely randomly.
Pair Corralation between Aberdeen Ultra and Aberdeen Short
Assuming the 90 days horizon Aberdeen Ultra is expected to generate 2.56 times less return on investment than Aberdeen Short. But when comparing it to its historical volatility, Aberdeen Ultra Short is 3.1 times less risky than Aberdeen Short. It trades about 0.21 of its potential returns per unit of risk. Aberdeen Short Duration is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 917.00 in Aberdeen Short Duration on August 26, 2024 and sell it today you would earn a total of 7.00 from holding Aberdeen Short Duration or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Ultra Short vs. Aberdeen Short Duration
Performance |
| Timeline |
| Aberdeen Ultra Short |
| Aberdeen Short Duration |
Aberdeen Ultra and Aberdeen Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Ultra and Aberdeen Short
The main advantage of trading using opposite Aberdeen Ultra and Aberdeen Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Ultra position performs unexpectedly, Aberdeen Short 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 Short will offset losses from the drop in Aberdeen Short's long position.| Aberdeen Ultra vs. Arrow Managed Futures | Aberdeen Ultra vs. Rbc Microcap Value | Aberdeen Ultra vs. Western Asset Municipal | Aberdeen Ultra vs. Scharf Global Opportunity |
| Aberdeen Short vs. Aberdeen Emerging Markets | Aberdeen Short vs. Aberdeen Emerging Markets | Aberdeen Short vs. Aberdeen Emerging Markets | Aberdeen Short 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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