Correlation Between Equity Series and Aberdeen Global
Can any of the company-specific risk be diversified away by investing in both Equity Series and Aberdeen Global 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 Equity Series and Aberdeen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Series Class and Aberdeen Global High, you can compare the effects of market volatilities on Equity Series and Aberdeen Global 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 Equity Series with a short position of Aberdeen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Series and Aberdeen Global.
Diversification Opportunities for Equity Series and Aberdeen Global
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Equity and Aberdeen is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Equity Series Class and Aberdeen Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global High and Equity Series 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 Equity Series Class are associated (or correlated) with Aberdeen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Global High has no effect on the direction of Equity Series i.e., Equity Series and Aberdeen Global go up and down completely randomly.
Pair Corralation between Equity Series and Aberdeen Global
Assuming the 90 days horizon Equity Series Class is expected to generate 3.72 times more return on investment than Aberdeen Global. However, Equity Series is 3.72 times more volatile than Aberdeen Global High. It trades about 0.06 of its potential returns per unit of risk. Aberdeen Global High is currently generating about 0.15 per unit of risk. If you would invest 1,349 in Equity Series Class on August 29, 2024 and sell it today you would earn a total of 353.00 from holding Equity Series Class or generate 26.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Equity Series Class vs. Aberdeen Global High
Performance |
| Timeline |
| Equity Series Class |
| Aberdeen Global High |
Equity Series and Aberdeen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Series and Aberdeen Global
The main advantage of trading using opposite Equity Series and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Series position performs unexpectedly, Aberdeen Global 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 Global will offset losses from the drop in Aberdeen Global's long position.| Equity Series vs. Large Cap Fund | Equity Series vs. Wasatch Large Cap | Equity Series vs. Westcore Plus Bond | Equity Series vs. Aberdeen Global High |
| Aberdeen Global vs. Metropolitan West High | Aberdeen Global vs. Westcore Plus Bond | Aberdeen Global vs. Loomis Sayles Bond | Aberdeen Global vs. Equity Series Class |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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