Correlation Between Eclectic Bar and Aberdeen Diversified
Can any of the company-specific risk be diversified away by investing in both Eclectic Bar and Aberdeen Diversified 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 Eclectic Bar and Aberdeen Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eclectic Bar Group and Aberdeen Diversified Income, you can compare the effects of market volatilities on Eclectic Bar and Aberdeen Diversified 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 Eclectic Bar with a short position of Aberdeen Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eclectic Bar and Aberdeen Diversified.
Diversification Opportunities for Eclectic Bar and Aberdeen Diversified
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eclectic and Aberdeen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Eclectic Bar Group and Aberdeen Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Diversified and Eclectic Bar 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 Eclectic Bar Group are associated (or correlated) with Aberdeen Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Diversified has no effect on the direction of Eclectic Bar i.e., Eclectic Bar and Aberdeen Diversified go up and down completely randomly.
Pair Corralation between Eclectic Bar and Aberdeen Diversified
Assuming the 90 days trading horizon Eclectic Bar Group is expected to generate 3.54 times more return on investment than Aberdeen Diversified. However, Eclectic Bar is 3.54 times more volatile than Aberdeen Diversified Income. It trades about 0.04 of its potential returns per unit of risk. Aberdeen Diversified Income is currently generating about 0.02 per unit of risk. If you would invest 2,650 in Eclectic Bar Group on October 12, 2024 and sell it today you would earn a total of 2,050 from holding Eclectic Bar Group or generate 77.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eclectic Bar Group vs. Aberdeen Diversified Income
Performance |
| Timeline |
| Eclectic Bar Group |
| Aberdeen Diversified |
Eclectic Bar and Aberdeen Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eclectic Bar and Aberdeen Diversified
The main advantage of trading using opposite Eclectic Bar and Aberdeen Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eclectic Bar position performs unexpectedly, Aberdeen Diversified 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 Diversified will offset losses from the drop in Aberdeen Diversified's long position.| Eclectic Bar vs. Aberdeen Diversified Income | Eclectic Bar vs. Sunny Optical Technology | Eclectic Bar vs. Seraphim Space Investment | Eclectic Bar vs. Alfa Financial Software |
| Aberdeen Diversified vs. BH Macro Limited | Aberdeen Diversified vs. Intermediate Capital Group | Aberdeen Diversified vs. FC Investment Trust | Aberdeen Diversified vs. Polar Capital Technology |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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