Correlation Between Aberdeen and Aberdeen Equity
Can any of the company-specific risk be diversified away by investing in both Aberdeen and Aberdeen Equity 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 Equity 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 Equity A, you can compare the effects of market volatilities on Aberdeen and Aberdeen Equity 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 Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen and Aberdeen Equity.
Diversification Opportunities for Aberdeen and Aberdeen Equity
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aberdeen and Aberdeen is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Eq Long Short and Aberdeen Equity A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Equity A 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 Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Equity A has no effect on the direction of Aberdeen i.e., Aberdeen and Aberdeen Equity go up and down completely randomly.
Pair Corralation between Aberdeen and Aberdeen Equity
Assuming the 90 days horizon Aberdeen Eq Long Short is expected to generate 1.51 times more return on investment than Aberdeen Equity. However, Aberdeen is 1.51 times more volatile than Aberdeen Equity A. It trades about 0.08 of its potential returns per unit of risk. Aberdeen Equity A is currently generating about 0.07 per unit of risk. If you would invest 729.00 in Aberdeen Eq Long Short on August 29, 2024 and sell it today you would earn a total of 232.00 from holding Aberdeen Eq Long Short or generate 31.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Eq Long Short vs. Aberdeen Equity A
Performance |
| Timeline |
| Aberdeen Eq Long |
| Aberdeen Equity A |
Aberdeen and Aberdeen Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen and Aberdeen Equity
The main advantage of trading using opposite Aberdeen and Aberdeen Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen position performs unexpectedly, Aberdeen Equity 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 Equity will offset losses from the drop in Aberdeen Equity's long position.| Aberdeen vs. Fidelity Sai Convertible | Aberdeen vs. Absolute Convertible Arbitrage | Aberdeen vs. Gabelli Convertible And | Aberdeen vs. Lord Abbett Convertible |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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