Correlation Between FC Investment and Abrdn UK
Can any of the company-specific risk be diversified away by investing in both FC Investment and Abrdn UK 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 FC Investment and Abrdn UK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FC Investment Trust and Abrdn UK Smaller, you can compare the effects of market volatilities on FC Investment and Abrdn UK 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 FC Investment with a short position of Abrdn UK. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Abrdn UK.
Diversification Opportunities for FC Investment and Abrdn UK
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between FCIT and Abrdn is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and Abrdn UK Smaller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abrdn UK Smaller and FC Investment 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 FC Investment Trust are associated (or correlated) with Abrdn UK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abrdn UK Smaller has no effect on the direction of FC Investment i.e., FC Investment and Abrdn UK go up and down completely randomly.
Pair Corralation between FC Investment and Abrdn UK
Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.88 times more return on investment than Abrdn UK. However, FC Investment Trust is 1.14 times less risky than Abrdn UK. It trades about 0.43 of its potential returns per unit of risk. Abrdn UK Smaller is currently generating about -0.01 per unit of risk. If you would invest 110,839 in FC Investment Trust on October 24, 2024 and sell it today you would earn a total of 7,361 from holding FC Investment Trust or generate 6.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
FC Investment Trust vs. Abrdn UK Smaller
Performance |
| Timeline |
| FC Investment Trust |
| Abrdn UK Smaller |
FC Investment and Abrdn UK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Abrdn UK
The main advantage of trading using opposite FC Investment and Abrdn UK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment position performs unexpectedly, Abrdn UK 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 Abrdn UK will offset losses from the drop in Abrdn UK's long position.| FC Investment vs. Hollywood Bowl Group | FC Investment vs. Alaska Air Group | FC Investment vs. JD Sports Fashion | FC Investment vs. Delta Air Lines |
| Abrdn UK vs. FC Investment Trust | Abrdn UK vs. Trainline Plc | Abrdn UK vs. Caledonia Investments | Abrdn UK vs. Mineral Financial Investments |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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