Correlation Between GM and Aberdeen Ultra
Can any of the company-specific risk be diversified away by investing in both GM and Aberdeen Ultra 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 GM and Aberdeen Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Aberdeen Ultra Short, you can compare the effects of market volatilities on GM and Aberdeen Ultra 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 GM with a short position of Aberdeen Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Aberdeen Ultra.
Diversification Opportunities for GM and Aberdeen Ultra
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Aberdeen is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Aberdeen Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Ultra Short and GM 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 General Motors are associated (or correlated) with Aberdeen Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Ultra Short has no effect on the direction of GM i.e., GM and Aberdeen Ultra go up and down completely randomly.
Pair Corralation between GM and Aberdeen Ultra
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Aberdeen Ultra. In addition to that, GM is 137.61 times more volatile than Aberdeen Ultra Short. It trades about -0.11 of its total potential returns per unit of risk. Aberdeen Ultra Short is currently generating about 0.23 per unit of volatility. If you would invest 1,009 in Aberdeen Ultra Short on November 1, 2024 and sell it today you would earn a total of 1.00 from holding Aberdeen Ultra Short or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Aberdeen Ultra Short
Performance |
| Timeline |
| General Motors |
| Aberdeen Ultra Short |
GM and Aberdeen Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Aberdeen Ultra
The main advantage of trading using opposite GM and Aberdeen Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Aberdeen Ultra 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 Ultra will offset losses from the drop in Aberdeen Ultra's long position.The idea behind General Motors and Aberdeen Ultra Short pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Aberdeen Ultra vs. Aberdeen Emerging Markets | Aberdeen Ultra vs. Aberdeen Emerging Markets | Aberdeen Ultra vs. Aberdeen Emerging Markets | Aberdeen Ultra vs. Aberdeen Gbl Eq |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |