Correlation Between Aberdeen Asia and Washington Mutual
Can any of the company-specific risk be diversified away by investing in both Aberdeen Asia and Washington Mutual 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 Washington Mutual 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 Washington Mutual Investors, you can compare the effects of market volatilities on Aberdeen Asia and Washington Mutual 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 Washington Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Asia and Washington Mutual.
Diversification Opportunities for Aberdeen Asia and Washington Mutual
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aberdeen and Washington is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Asia Pacific If and Washington Mutual Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Mutual 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 Washington Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Mutual has no effect on the direction of Aberdeen Asia i.e., Aberdeen Asia and Washington Mutual go up and down completely randomly.
Pair Corralation between Aberdeen Asia and Washington Mutual
Considering the 90-day investment horizon Aberdeen Asia Pacific If is expected to generate 0.9 times more return on investment than Washington Mutual. However, Aberdeen Asia Pacific If is 1.11 times less risky than Washington Mutual. It trades about 0.47 of its potential returns per unit of risk. Washington Mutual Investors is currently generating about 0.25 per unit of risk. If you would invest 1,467 in Aberdeen Asia Pacific If on November 5, 2024 and sell it today you would earn a total of 82.00 from holding Aberdeen Asia Pacific If or generate 5.59% 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. Washington Mutual Investors
Performance |
| Timeline |
| Aberdeen Asia Pacific |
| Washington Mutual |
Aberdeen Asia and Washington Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Asia and Washington Mutual
The main advantage of trading using opposite Aberdeen Asia and Washington Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Asia position performs unexpectedly, Washington Mutual 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 Washington Mutual will offset losses from the drop in Washington Mutual'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 |
| Washington Mutual vs. Lord Abbett Inflation | Washington Mutual vs. Ab Bond Inflation | Washington Mutual vs. Short Duration Inflation | Washington Mutual vs. Ab Bond Inflation |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |