Correlation Between American Funds and Aberdeen Emerging
Can any of the company-specific risk be diversified away by investing in both American Funds and Aberdeen 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 American Funds and Aberdeen Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds New and Aberdeen Emerging Markts, you can compare the effects of market volatilities on American Funds and Aberdeen 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 American Funds with a short position of Aberdeen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Aberdeen Emerging.
Diversification Opportunities for American Funds and Aberdeen Emerging
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Aberdeen is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding American Funds New and Aberdeen Emerging Markts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Emerging Markts and American Funds 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 American Funds New are associated (or correlated) with Aberdeen Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Emerging Markts has no effect on the direction of American Funds i.e., American Funds and Aberdeen Emerging go up and down completely randomly.
Pair Corralation between American Funds and Aberdeen Emerging
Assuming the 90 days horizon American Funds New is expected to generate 0.73 times more return on investment than Aberdeen Emerging. However, American Funds New is 1.37 times less risky than Aberdeen Emerging. It trades about -0.19 of its potential returns per unit of risk. Aberdeen Emerging Markts is currently generating about -0.17 per unit of risk. If you would invest 8,351 in American Funds New on August 28, 2024 and sell it today you would lose (226.00) from holding American Funds New or give up 2.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds New vs. Aberdeen Emerging Markts
Performance |
| Timeline |
| American Funds New |
| Aberdeen Emerging Markts |
American Funds and Aberdeen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Aberdeen Emerging
The main advantage of trading using opposite American Funds and Aberdeen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Aberdeen 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 Aberdeen Emerging will offset losses from the drop in Aberdeen Emerging's long position.| American Funds vs. California High Yield Municipal | American Funds vs. Pioneer High Income | American Funds vs. Pace High Yield | American Funds vs. Metropolitan West High |
| Aberdeen Emerging vs. Technology Ultrasector Profund | Aberdeen Emerging vs. Fidelity Advisor Technology | Aberdeen Emerging vs. Allianzgi Technology Fund | Aberdeen Emerging vs. Janus Global Technology |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |