Correlation Between Dunham High and Aberdeen
Can any of the company-specific risk be diversified away by investing in both Dunham High 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 Dunham High and Aberdeen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham High Yield and Aberdeen Multi Cap Equity, you can compare the effects of market volatilities on Dunham High 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 Dunham High with a short position of Aberdeen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Aberdeen.
Diversification Opportunities for Dunham High and Aberdeen
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dunham and Aberdeen is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield 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 Dunham High 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 Dunham High Yield 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 Dunham High i.e., Dunham High and Aberdeen go up and down completely randomly.
Pair Corralation between Dunham High and Aberdeen
Assuming the 90 days horizon Dunham High is expected to generate 5.45 times less return on investment than Aberdeen. But when comparing it to its historical volatility, Dunham High Yield is 5.19 times less risky than Aberdeen. It trades about 0.29 of its potential returns per unit of risk. Aberdeen Multi Cap Equity is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,348 in Aberdeen Multi Cap Equity on September 1, 2024 and sell it today you would earn a total of 71.00 from holding Aberdeen Multi Cap Equity or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dunham High Yield vs. Aberdeen Multi Cap Equity
Performance |
| Timeline |
| Dunham High Yield |
| Aberdeen Multi Cap |
Dunham High and Aberdeen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham High and Aberdeen
The main advantage of trading using opposite Dunham High and Aberdeen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham High 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.| Dunham High vs. Dunham Dynamic Macro | Dunham High vs. Dunham Porategovernment Bond | Dunham High vs. Dunham Small Cap | Dunham High vs. Dunham Emerging Markets |
| Aberdeen vs. Aberdeen Emerging Markets | Aberdeen vs. Aberdeen Emerging Markets | Aberdeen vs. Aberdeen Emerging Markets | Aberdeen vs. Aberdeen Gbl Eq |
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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