Correlation Between BBX Capital and Aberdeen International
Can any of the company-specific risk be diversified away by investing in both BBX Capital and Aberdeen International 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 BBX Capital and Aberdeen International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BBX Capital and Aberdeen International, you can compare the effects of market volatilities on BBX Capital and Aberdeen International 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 BBX Capital with a short position of Aberdeen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBX Capital and Aberdeen International.
Diversification Opportunities for BBX Capital and Aberdeen International
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BBX and Aberdeen is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding BBX Capital and Aberdeen International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen International and BBX Capital 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 BBX Capital are associated (or correlated) with Aberdeen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen International has no effect on the direction of BBX Capital i.e., BBX Capital and Aberdeen International go up and down completely randomly.
Pair Corralation between BBX Capital and Aberdeen International
Assuming the 90 days horizon BBX Capital is expected to under-perform the Aberdeen International. But the otc stock apears to be less risky and, when comparing its historical volatility, BBX Capital is 12.3 times less risky than Aberdeen International. The otc stock trades about -0.02 of its potential returns per unit of risk. The Aberdeen International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Aberdeen International on September 3, 2024 and sell it today you would lose (0.19) from holding Aberdeen International or give up 4.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BBX Capital vs. Aberdeen International
Performance |
| Timeline |
| BBX Capital |
| Aberdeen International |
BBX Capital and Aberdeen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BBX Capital and Aberdeen International
The main advantage of trading using opposite BBX Capital and Aberdeen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBX Capital position performs unexpectedly, Aberdeen International 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 International will offset losses from the drop in Aberdeen International's long position.| BBX Capital vs. Ameritrans Capital Corp | BBX Capital vs. Bounce Mobile Systems | BBX Capital vs. Elysee Development Corp | BBX Capital vs. AGF Management Limited |
| Aberdeen International vs. Flow Capital Corp | Aberdeen International vs. Ameritrans Capital Corp | Aberdeen International vs. Blackhawk Growth Corp | Aberdeen International vs. Azimut Holding SpA |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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