Correlation Between Aberdeen Emerging and Inverse Nasdaq-100
Can any of the company-specific risk be diversified away by investing in both Aberdeen Emerging and Inverse Nasdaq-100 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 Inverse Nasdaq-100 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 Inverse Nasdaq 100 Strategy, you can compare the effects of market volatilities on Aberdeen Emerging and Inverse Nasdaq-100 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 Inverse Nasdaq-100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Emerging and Inverse Nasdaq-100.
Diversification Opportunities for Aberdeen Emerging and Inverse Nasdaq-100
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aberdeen and Inverse is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Emerging Markets and Inverse Nasdaq 100 Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse Nasdaq 100 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 Inverse Nasdaq-100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse Nasdaq 100 has no effect on the direction of Aberdeen Emerging i.e., Aberdeen Emerging and Inverse Nasdaq-100 go up and down completely randomly.
Pair Corralation between Aberdeen Emerging and Inverse Nasdaq-100
Assuming the 90 days horizon Aberdeen Emerging Markets is expected to generate 0.68 times more return on investment than Inverse Nasdaq-100. However, Aberdeen Emerging Markets is 1.48 times less risky than Inverse Nasdaq-100. It trades about 0.06 of its potential returns per unit of risk. Inverse Nasdaq 100 Strategy is currently generating about -0.08 per unit of risk. If you would invest 1,322 in Aberdeen Emerging Markets on November 3, 2024 and sell it today you would earn a total of 14.00 from holding Aberdeen Emerging Markets or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Emerging Markets vs. Inverse Nasdaq 100 Strategy
Performance |
| Timeline |
| Aberdeen Emerging Markets |
| Inverse Nasdaq 100 |
Aberdeen Emerging and Inverse Nasdaq-100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Emerging and Inverse Nasdaq-100
The main advantage of trading using opposite Aberdeen Emerging and Inverse Nasdaq-100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Emerging position performs unexpectedly, Inverse Nasdaq-100 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 Inverse Nasdaq-100 will offset losses from the drop in Inverse Nasdaq-100's long position.| Aberdeen Emerging vs. Alphacentric Lifesci Healthcare | Aberdeen Emerging vs. Tekla Healthcare Investors | Aberdeen Emerging vs. Allianzgi Health Sciences | Aberdeen Emerging vs. Invesco Global Health |
| Inverse Nasdaq-100 vs. Franklin Adjustable Government | Inverse Nasdaq-100 vs. Hartford Municipal Short | Inverse Nasdaq-100 vs. Gamco Global Telecommunications | Inverse Nasdaq-100 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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