Correlation Between Intermediate Government and Aberdeen Gbl
Can any of the company-specific risk be diversified away by investing in both Intermediate Government and Aberdeen Gbl 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 Intermediate Government and Aberdeen Gbl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Government Bond and Aberdeen Gbl Eq, you can compare the effects of market volatilities on Intermediate Government and Aberdeen Gbl 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 Intermediate Government with a short position of Aberdeen Gbl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Government and Aberdeen Gbl.
Diversification Opportunities for Intermediate Government and Aberdeen Gbl
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intermediate and Aberdeen is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Government Bond and Aberdeen Gbl Eq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Gbl Eq and Intermediate Government 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 Intermediate Government Bond are associated (or correlated) with Aberdeen Gbl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Gbl Eq has no effect on the direction of Intermediate Government i.e., Intermediate Government and Aberdeen Gbl go up and down completely randomly.
Pair Corralation between Intermediate Government and Aberdeen Gbl
Assuming the 90 days horizon Intermediate Government is expected to generate 1.51 times less return on investment than Aberdeen Gbl. But when comparing it to its historical volatility, Intermediate Government Bond is 6.82 times less risky than Aberdeen Gbl. It trades about 0.26 of its potential returns per unit of risk. Aberdeen Gbl Eq is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,066 in Aberdeen Gbl Eq on October 25, 2024 and sell it today you would earn a total of 8.00 from holding Aberdeen Gbl Eq or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intermediate Government Bond vs. Aberdeen Gbl Eq
Performance |
| Timeline |
| Intermediate Government |
| Aberdeen Gbl Eq |
Intermediate Government and Aberdeen Gbl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Government and Aberdeen Gbl
The main advantage of trading using opposite Intermediate Government and Aberdeen Gbl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Government position performs unexpectedly, Aberdeen Gbl 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 Gbl will offset losses from the drop in Aberdeen Gbl's long position.| Intermediate Government vs. Growth Allocation Fund | Intermediate Government vs. Small Pany Growth | Intermediate Government vs. Stringer Growth Fund | Intermediate Government vs. Tfa Alphagen Growth |
| Aberdeen Gbl vs. Elfun Government Money | Aberdeen Gbl vs. Prudential Government Money | Aberdeen Gbl vs. Intermediate Government Bond | Aberdeen Gbl vs. Dreyfus Government Cash |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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