Correlation Between Aberdeen Global and Nicholas
Can any of the company-specific risk be diversified away by investing in both Aberdeen Global and Nicholas 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 Global and Nicholas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Global High and Nicholas Ii Inc, you can compare the effects of market volatilities on Aberdeen Global and Nicholas 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 Global with a short position of Nicholas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Global and Nicholas.
Diversification Opportunities for Aberdeen Global and Nicholas
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aberdeen and Nicholas is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global High and Nicholas Ii Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicholas Ii and Aberdeen Global 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 Global High are associated (or correlated) with Nicholas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicholas Ii has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and Nicholas go up and down completely randomly.
Pair Corralation between Aberdeen Global and Nicholas
Assuming the 90 days horizon Aberdeen Global is expected to generate 1.38 times less return on investment than Nicholas. But when comparing it to its historical volatility, Aberdeen Global High is 3.74 times less risky than Nicholas. It trades about 0.15 of its potential returns per unit of risk. Nicholas Ii Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,837 in Nicholas Ii Inc on August 24, 2024 and sell it today you would earn a total of 721.00 from holding Nicholas Ii Inc or generate 25.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Global High vs. Nicholas Ii Inc
Performance |
| Timeline |
| Aberdeen Global High |
| Nicholas Ii |
Aberdeen Global and Nicholas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Global and Nicholas
The main advantage of trading using opposite Aberdeen Global and Nicholas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Global position performs unexpectedly, Nicholas 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 Nicholas will offset losses from the drop in Nicholas' long position.| Aberdeen Global vs. Prudential High Yield | Aberdeen Global vs. Parametric Modity Strategy | Aberdeen Global vs. HUMANA INC | Aberdeen Global vs. Aquagold International |
| Nicholas vs. Touchstone Sands Capital | Nicholas vs. Mid Cap Value | Nicholas vs. Fidelity Focused High | Nicholas vs. Harding Loevner International |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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