Correlation Between Aberdeen Asia and First Trust
Can any of the company-specific risk be diversified away by investing in both Aberdeen Asia and First Trust 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 Aberdeen Asia and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Asia Pacific If and First Trust Mlp, you can compare the effects of market volatilities on Aberdeen Asia and First Trust 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 Aberdeen Asia with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Asia and First Trust.
Diversification Opportunities for Aberdeen Asia and First Trust
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aberdeen and First is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Asia Pacific If and First Trust Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Mlp and Aberdeen Asia 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 Aberdeen Asia Pacific If are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Mlp has no effect on the direction of Aberdeen Asia i.e., Aberdeen Asia and First Trust go up and down completely randomly.
Pair Corralation between Aberdeen Asia and First Trust
If you would invest 1,468 in Aberdeen Asia Pacific If on November 3, 2024 and sell it today you would earn a total of 81.00 from holding Aberdeen Asia Pacific If or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Aberdeen Asia Pacific If vs. First Trust Mlp
Performance |
| Timeline |
| Aberdeen Asia Pacific |
| First Trust Mlp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aberdeen Asia and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Asia and First Trust
The main advantage of trading using opposite Aberdeen Asia and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Asia position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Aberdeen Asia vs. Aberdeen Australia Ef | Aberdeen Asia vs. Aberdeen Japan Equity | Aberdeen Asia vs. Stone Harbor Emerging | Aberdeen Asia vs. Aberdeen Global IF |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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