Correlation Between Aberdeen Asia and Aberdeen Japan
Can any of the company-specific risk be diversified away by investing in both Aberdeen Asia and Aberdeen Japan 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 Aberdeen Japan 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 Aberdeen Japan Equity, you can compare the effects of market volatilities on Aberdeen Asia and Aberdeen Japan 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 Aberdeen Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Asia and Aberdeen Japan.
Diversification Opportunities for Aberdeen Asia and Aberdeen Japan
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aberdeen and Aberdeen is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Asia Pacific If and Aberdeen Japan Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Japan Equity 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 Aberdeen Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Japan Equity has no effect on the direction of Aberdeen Asia i.e., Aberdeen Asia and Aberdeen Japan go up and down completely randomly.
Pair Corralation between Aberdeen Asia and Aberdeen Japan
Considering the 90-day investment horizon Aberdeen Asia Pacific If is expected to generate 0.61 times more return on investment than Aberdeen Japan. However, Aberdeen Asia Pacific If is 1.63 times less risky than Aberdeen Japan. It trades about 0.42 of its potential returns per unit of risk. Aberdeen Japan Equity is currently generating about 0.12 per unit of risk. If you would invest 1,468 in Aberdeen Asia Pacific If on November 2, 2024 and sell it today you would earn a total of 76.00 from holding Aberdeen Asia Pacific If or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Asia Pacific If vs. Aberdeen Japan Equity
Performance |
| Timeline |
| Aberdeen Asia Pacific |
| Aberdeen Japan Equity |
Aberdeen Asia and Aberdeen Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Asia and Aberdeen Japan
The main advantage of trading using opposite Aberdeen Asia and Aberdeen Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Asia position performs unexpectedly, Aberdeen Japan 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 Japan will offset losses from the drop in Aberdeen Japan'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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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