Correlation Between Aberdeen Asia-pacific and Templeton Emerging
Can any of the company-specific risk be diversified away by investing in both Aberdeen Asia-pacific and Templeton Emerging 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-pacific and Templeton Emerging 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 Templeton Emerging Markets, you can compare the effects of market volatilities on Aberdeen Asia-pacific and Templeton Emerging 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-pacific with a short position of Templeton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Asia-pacific and Templeton Emerging.
Diversification Opportunities for Aberdeen Asia-pacific and Templeton Emerging
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aberdeen and Templeton is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Asia Pacific If and Templeton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Emerging and Aberdeen Asia-pacific 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 Templeton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Emerging has no effect on the direction of Aberdeen Asia-pacific i.e., Aberdeen Asia-pacific and Templeton Emerging go up and down completely randomly.
Pair Corralation between Aberdeen Asia-pacific and Templeton Emerging
Considering the 90-day investment horizon Aberdeen Asia-pacific is expected to generate 2.38 times less return on investment than Templeton Emerging. In addition to that, Aberdeen Asia-pacific is 1.0 times more volatile than Templeton Emerging Markets. It trades about 0.03 of its total potential returns per unit of risk. Templeton Emerging Markets is currently generating about 0.06 per unit of volatility. If you would invest 436.00 in Templeton Emerging Markets on August 31, 2024 and sell it today you would earn a total of 101.00 from holding Templeton Emerging Markets or generate 23.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Asia Pacific If vs. Templeton Emerging Markets
Performance |
| Timeline |
| Aberdeen Asia Pacific |
| Templeton Emerging |
Aberdeen Asia-pacific and Templeton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Asia-pacific and Templeton Emerging
The main advantage of trading using opposite Aberdeen Asia-pacific and Templeton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Asia-pacific position performs unexpectedly, Templeton Emerging 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 Templeton Emerging will offset losses from the drop in Templeton Emerging's long position.| Aberdeen Asia-pacific vs. Aberdeen Australia Ef | Aberdeen Asia-pacific vs. Aberdeen Japan Equity | Aberdeen Asia-pacific vs. Stone Harbor Emerging | Aberdeen Asia-pacific vs. Aberdeen Global IF |
| Templeton Emerging vs. MFS Investment Grade | Templeton Emerging vs. Eaton Vance Municipal | Templeton Emerging vs. DTF Tax Free | Templeton Emerging vs. HUMANA INC |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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