Correlation Between Aberdeen and Aberdeen Gbl
Can any of the company-specific risk be diversified away by investing in both Aberdeen and Aberdeen Gbl 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 and Aberdeen Gbl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Eq Long Short and Aberdeen Gbl Eq, you can compare the effects of market volatilities on Aberdeen and Aberdeen Gbl 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 with a short position of Aberdeen Gbl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen and Aberdeen Gbl.
Diversification Opportunities for Aberdeen and Aberdeen Gbl
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aberdeen and Aberdeen is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Eq Long Short and Aberdeen Gbl Eq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Gbl Eq and Aberdeen 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 Eq Long Short are associated (or correlated) with Aberdeen Gbl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Gbl Eq has no effect on the direction of Aberdeen i.e., Aberdeen and Aberdeen Gbl go up and down completely randomly.
Pair Corralation between Aberdeen and Aberdeen Gbl
Assuming the 90 days horizon Aberdeen Eq Long Short is expected to generate 2.2 times more return on investment than Aberdeen Gbl. However, Aberdeen is 2.2 times more volatile than Aberdeen Gbl Eq. It trades about 0.3 of its potential returns per unit of risk. Aberdeen Gbl Eq is currently generating about -0.14 per unit of risk. If you would invest 867.00 in Aberdeen Eq Long Short on August 25, 2024 and sell it today you would earn a total of 89.00 from holding Aberdeen Eq Long Short or generate 10.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Eq Long Short vs. Aberdeen Gbl Eq
Performance |
| Timeline |
| Aberdeen Eq Long |
| Aberdeen Gbl Eq |
Aberdeen and Aberdeen Gbl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen and Aberdeen Gbl
The main advantage of trading using opposite Aberdeen and Aberdeen Gbl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen position performs unexpectedly, Aberdeen Gbl 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 Gbl will offset losses from the drop in Aberdeen Gbl's long position.| Aberdeen vs. Vanguard Small Cap Growth | Aberdeen vs. Vanguard Small Cap Growth | Aberdeen vs. Vanguard Explorer Fund | Aberdeen vs. Vanguard Explorer Fund |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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