Correlation Between Gold Fields and Aberdeen Income
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Aberdeen Income 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 Gold Fields and Aberdeen Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Fields Ltd and Aberdeen Income Credit, you can compare the effects of market volatilities on Gold Fields and Aberdeen Income 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 Gold Fields with a short position of Aberdeen Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Aberdeen Income.
Diversification Opportunities for Gold Fields and Aberdeen Income
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gold and Aberdeen is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Aberdeen Income Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Income Credit and Gold Fields 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 Gold Fields Ltd are associated (or correlated) with Aberdeen Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Income Credit has no effect on the direction of Gold Fields i.e., Gold Fields and Aberdeen Income go up and down completely randomly.
Pair Corralation between Gold Fields and Aberdeen Income
Considering the 90-day investment horizon Gold Fields Ltd is expected to under-perform the Aberdeen Income. In addition to that, Gold Fields is 1.61 times more volatile than Aberdeen Income Credit. It trades about -0.19 of its total potential returns per unit of risk. Aberdeen Income Credit is currently generating about -0.08 per unit of volatility. If you would invest 2,414 in Aberdeen Income Credit on September 1, 2024 and sell it today you would lose (84.00) from holding Aberdeen Income Credit or give up 3.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gold Fields Ltd vs. Aberdeen Income Credit
Performance |
| Timeline |
| Gold Fields |
| Aberdeen Income Credit |
Gold Fields and Aberdeen Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Aberdeen Income
The main advantage of trading using opposite Gold Fields and Aberdeen Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Aberdeen Income 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 Income will offset losses from the drop in Aberdeen Income's long position.| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Kinross Gold | Gold Fields vs. Harmony Gold Mining | Gold Fields vs. Franco Nevada |
| Aberdeen Income vs. The Gabelli Equity | Aberdeen Income vs. GAMCO Natural Resources | Aberdeen Income vs. The Gabelli Dividend | Aberdeen Income vs. The Gabelli Multimedia |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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