Correlation Between Canadian Natural and Abrdn Asia
Can any of the company-specific risk be diversified away by investing in both Canadian Natural and Abrdn Asia 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 Canadian Natural and Abrdn Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Natural Resources and abrdn Asia Pacific, you can compare the effects of market volatilities on Canadian Natural and Abrdn Asia 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 Canadian Natural with a short position of Abrdn Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Natural and Abrdn Asia.
Diversification Opportunities for Canadian Natural and Abrdn Asia
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canadian and Abrdn is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Natural Resources and abrdn Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn Asia Pacific and Canadian Natural 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 Canadian Natural Resources are associated (or correlated) with Abrdn Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn Asia Pacific has no effect on the direction of Canadian Natural i.e., Canadian Natural and Abrdn Asia go up and down completely randomly.
Pair Corralation between Canadian Natural and Abrdn Asia
Assuming the 90 days trading horizon Canadian Natural Resources is expected to under-perform the Abrdn Asia. In addition to that, Canadian Natural is 2.71 times more volatile than abrdn Asia Pacific. It trades about -0.13 of its total potential returns per unit of risk. abrdn Asia Pacific is currently generating about 0.09 per unit of volatility. If you would invest 276.00 in abrdn Asia Pacific on September 12, 2024 and sell it today you would earn a total of 3.00 from holding abrdn Asia Pacific or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Natural Resources vs. abrdn Asia Pacific
Performance |
| Timeline |
| Canadian Natural Res |
| abrdn Asia Pacific |
Canadian Natural and Abrdn Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Natural and Abrdn Asia
The main advantage of trading using opposite Canadian Natural and Abrdn Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Natural position performs unexpectedly, Abrdn Asia 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 Abrdn Asia will offset losses from the drop in Abrdn Asia's long position.| Canadian Natural vs. Suncor Energy | Canadian Natural vs. Cenovus Energy | Canadian Natural vs. TC Energy Corp | Canadian Natural vs. Enbridge |
| Abrdn Asia vs. Global Dividend Growth | Abrdn Asia vs. Dividend Select 15 | Abrdn Asia vs. Brompton Split Banc | Abrdn Asia vs. Life Banc Split |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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