Correlation Between Aberdeen Emerging and Aberdeen Global
Can any of the company-specific risk be diversified away by investing in both Aberdeen Emerging and Aberdeen Global 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 Emerging and Aberdeen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Emerging Markets and Aberdeen Global Equty, you can compare the effects of market volatilities on Aberdeen Emerging and Aberdeen Global 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 Emerging with a short position of Aberdeen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Emerging and Aberdeen Global.
Diversification Opportunities for Aberdeen Emerging and Aberdeen Global
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aberdeen and Aberdeen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Emerging Markets and Aberdeen Global Equty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global Equty and Aberdeen Emerging 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 Emerging Markets are associated (or correlated) with Aberdeen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Global Equty has no effect on the direction of Aberdeen Emerging i.e., Aberdeen Emerging and Aberdeen Global go up and down completely randomly.
Pair Corralation between Aberdeen Emerging and Aberdeen Global
Assuming the 90 days horizon Aberdeen Emerging Markets is expected to generate 1.43 times more return on investment than Aberdeen Global. However, Aberdeen Emerging is 1.43 times more volatile than Aberdeen Global Equty. It trades about -0.08 of its potential returns per unit of risk. Aberdeen Global Equty is currently generating about -0.17 per unit of risk. If you would invest 1,443 in Aberdeen Emerging Markets on August 26, 2024 and sell it today you would lose (54.00) from holding Aberdeen Emerging Markets or give up 3.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Emerging Markets vs. Aberdeen Global Equty
Performance |
| Timeline |
| Aberdeen Emerging Markets |
| Aberdeen Global Equty |
Aberdeen Emerging and Aberdeen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Emerging and Aberdeen Global
The main advantage of trading using opposite Aberdeen Emerging and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Emerging position performs unexpectedly, Aberdeen Global 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 Global will offset losses from the drop in Aberdeen Global's long position.| Aberdeen Emerging vs. Aberdeen Emerging Markets | Aberdeen Emerging vs. Aberdeen Gbl Eq | Aberdeen Emerging vs. Aberdeen Gbl Eq | Aberdeen Emerging vs. Columbia Seligman Premium |
| Aberdeen Global vs. Aberdeen Emerging Markets | Aberdeen Global vs. Aberdeen Emerging Markets | Aberdeen Global vs. Aberdeen Gbl Eq | Aberdeen Global vs. Aberdeen Gbl Eq |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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