Correlation Between Aberdeen Emerging and Aberdeen Small
Can any of the company-specific risk be diversified away by investing in both Aberdeen Emerging and Aberdeen Small 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 Small 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 Small Cap, you can compare the effects of market volatilities on Aberdeen Emerging and Aberdeen Small 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 Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Emerging and Aberdeen Small.
Diversification Opportunities for Aberdeen Emerging and Aberdeen Small
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aberdeen and Aberdeen is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Emerging Markets and Aberdeen Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Small Cap 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 Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Small Cap has no effect on the direction of Aberdeen Emerging i.e., Aberdeen Emerging and Aberdeen Small go up and down completely randomly.
Pair Corralation between Aberdeen Emerging and Aberdeen Small
Assuming the 90 days horizon Aberdeen Emerging Markets is expected to under-perform the Aberdeen Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aberdeen Emerging Markets is 1.26 times less risky than Aberdeen Small. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Aberdeen Small Cap is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,246 in Aberdeen Small Cap on September 12, 2024 and sell it today you would earn a total of 32.00 from holding Aberdeen Small Cap or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aberdeen Emerging Markets vs. Aberdeen Small Cap
Performance |
| Timeline |
| Aberdeen Emerging Markets |
| Aberdeen Small Cap |
Aberdeen Emerging and Aberdeen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Emerging and Aberdeen Small
The main advantage of trading using opposite Aberdeen Emerging and Aberdeen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Emerging position performs unexpectedly, Aberdeen Small 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 Small will offset losses from the drop in Aberdeen Small's long position.| Aberdeen Emerging vs. Locorr Market Trend | Aberdeen Emerging vs. Extended Market Index | Aberdeen Emerging vs. Kinetics Market Opportunities | Aberdeen Emerging vs. Shelton Emerging Markets |
| Aberdeen Small vs. Ab Impact Municipal | Aberdeen Small vs. Baird Strategic Municipal | Aberdeen Small vs. Oklahoma Municipal Fund | Aberdeen Small vs. Blrc Sgy Mnp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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