Correlation Between Abrdn Bloomberg and IShares Commodity
Can any of the company-specific risk be diversified away by investing in both Abrdn Bloomberg and IShares Commodity 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 Abrdn Bloomberg and IShares Commodity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between abrdn Bloomberg All and iShares Commodity Curve, you can compare the effects of market volatilities on Abrdn Bloomberg and IShares Commodity 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 Abrdn Bloomberg with a short position of IShares Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Bloomberg and IShares Commodity.
Diversification Opportunities for Abrdn Bloomberg and IShares Commodity
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Abrdn and IShares is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Bloomberg All and iShares Commodity Curve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Commodity Curve and Abrdn Bloomberg 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 abrdn Bloomberg All are associated (or correlated) with IShares Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Commodity Curve has no effect on the direction of Abrdn Bloomberg i.e., Abrdn Bloomberg and IShares Commodity go up and down completely randomly.
Pair Corralation between Abrdn Bloomberg and IShares Commodity
Considering the 90-day investment horizon Abrdn Bloomberg is expected to generate 1.65 times less return on investment than IShares Commodity. But when comparing it to its historical volatility, abrdn Bloomberg All is 1.22 times less risky than IShares Commodity. It trades about 0.07 of its potential returns per unit of risk. iShares Commodity Curve is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,063 in iShares Commodity Curve on August 27, 2024 and sell it today you would earn a total of 34.00 from holding iShares Commodity Curve or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
abrdn Bloomberg All vs. iShares Commodity Curve
Performance |
| Timeline |
| abrdn Bloomberg All |
| iShares Commodity Curve |
Abrdn Bloomberg and IShares Commodity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abrdn Bloomberg and IShares Commodity
The main advantage of trading using opposite Abrdn Bloomberg and IShares Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Bloomberg position performs unexpectedly, IShares Commodity 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 IShares Commodity will offset losses from the drop in IShares Commodity's long position.| Abrdn Bloomberg vs. GraniteShares Bloomberg Commodity | Abrdn Bloomberg vs. abrdn Bloomberg All | Abrdn Bloomberg vs. PIMCO 15 Year | Abrdn Bloomberg vs. Invesco Optimum Yield |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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