Correlation Between Aberdeen Emerging and Vanguard Emerging
Can any of the company-specific risk be diversified away by investing in both Aberdeen Emerging and Vanguard 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 Emerging and Vanguard Emerging 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 Vanguard Emerging Markets, you can compare the effects of market volatilities on Aberdeen Emerging and Vanguard 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 Emerging with a short position of Vanguard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Emerging and Vanguard Emerging.
Diversification Opportunities for Aberdeen Emerging and Vanguard Emerging
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aberdeen and Vanguard is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Emerging Markets and Vanguard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Emerging Markets 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 Vanguard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Emerging Markets has no effect on the direction of Aberdeen Emerging i.e., Aberdeen Emerging and Vanguard Emerging go up and down completely randomly.
Pair Corralation between Aberdeen Emerging and Vanguard Emerging
Assuming the 90 days horizon Aberdeen Emerging Markets is expected to generate 1.05 times more return on investment than Vanguard Emerging. However, Aberdeen Emerging is 1.05 times more volatile than Vanguard Emerging Markets. It trades about -0.08 of its potential returns per unit of risk. Vanguard Emerging Markets is currently generating about -0.11 per unit of risk. If you would invest 1,380 in Aberdeen Emerging Markets on September 1, 2024 and sell it today you would lose (23.00) from holding Aberdeen Emerging Markets or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aberdeen Emerging Markets vs. Vanguard Emerging Markets
Performance |
| Timeline |
| Aberdeen Emerging Markets |
| Vanguard Emerging Markets |
Aberdeen Emerging and Vanguard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Emerging and Vanguard Emerging
The main advantage of trading using opposite Aberdeen Emerging and Vanguard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Emerging position performs unexpectedly, Vanguard 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 Vanguard Emerging will offset losses from the drop in Vanguard Emerging's long position.| Aberdeen Emerging vs. Aberdeen Emerging Markets | Aberdeen Emerging vs. Aberdeen Emerging Markets | Aberdeen Emerging vs. Aberdeen Gbl Eq | Aberdeen Emerging vs. Aberdeen Gbl Eq |
| Vanguard Emerging vs. Vanguard Materials Index | Vanguard Emerging vs. Vanguard Limited Term Tax Exempt | Vanguard Emerging vs. Vanguard Limited Term Tax Exempt | Vanguard Emerging vs. Vanguard Global Minimum |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |