Correlation Between Barings Emerging and Aberdeen
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Aberdeen 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 Barings Emerging and Aberdeen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Emerging Markets and Aberdeen Multi Cap Equity, you can compare the effects of market volatilities on Barings Emerging and Aberdeen 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 Barings Emerging with a short position of Aberdeen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Aberdeen.
Diversification Opportunities for Barings Emerging and Aberdeen
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Barings and Aberdeen is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Aberdeen Multi Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Multi Cap and Barings Emerging 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 Barings Emerging Markets are associated (or correlated) with Aberdeen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Multi Cap has no effect on the direction of Barings Emerging i.e., Barings Emerging and Aberdeen go up and down completely randomly.
Pair Corralation between Barings Emerging and Aberdeen
Assuming the 90 days horizon Barings Emerging Markets is expected to under-perform the Aberdeen. But the mutual fund apears to be less risky and, when comparing its historical volatility, Barings Emerging Markets is 3.14 times less risky than Aberdeen. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Aberdeen Multi Cap Equity is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,366 in Aberdeen Multi Cap Equity on August 26, 2024 and sell it today you would earn a total of 25.00 from holding Aberdeen Multi Cap Equity or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Aberdeen Multi Cap Equity
Performance |
| Timeline |
| Barings Emerging Markets |
| Aberdeen Multi Cap |
Barings Emerging and Aberdeen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Aberdeen
The main advantage of trading using opposite Barings Emerging and Aberdeen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Aberdeen 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 will offset losses from the drop in Aberdeen's long position.| Barings Emerging vs. Barings Active Short | Barings Emerging vs. Barings Active Short | Barings Emerging vs. Barings Global Floating | Barings Emerging vs. Barings Global Floating |
| Aberdeen vs. Barings Emerging Markets | Aberdeen vs. Western Asset Diversified | Aberdeen vs. Rbc Emerging Markets | Aberdeen vs. Crossmark Steward Equity |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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