Correlation Between Aberdeen China and Aberdeen Global
Can any of the company-specific risk be diversified away by investing in both Aberdeen China and Aberdeen Global 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 China and Aberdeen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen China Oppty and Aberdeen Global High, you can compare the effects of market volatilities on Aberdeen China and Aberdeen Global 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 China with a short position of Aberdeen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen China and Aberdeen Global.
Diversification Opportunities for Aberdeen China and Aberdeen Global
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aberdeen and Aberdeen is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen China Oppty and Aberdeen Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global High and Aberdeen China 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 China Oppty are associated (or correlated) with Aberdeen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Global High has no effect on the direction of Aberdeen China i.e., Aberdeen China and Aberdeen Global go up and down completely randomly.
Pair Corralation between Aberdeen China and Aberdeen Global
Assuming the 90 days horizon Aberdeen China Oppty is expected to generate 4.85 times more return on investment than Aberdeen Global. However, Aberdeen China is 4.85 times more volatile than Aberdeen Global High. It trades about 0.15 of its potential returns per unit of risk. Aberdeen Global High is currently generating about 0.14 per unit of risk. If you would invest 2,139 in Aberdeen China Oppty on November 3, 2024 and sell it today you would earn a total of 65.00 from holding Aberdeen China Oppty or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen China Oppty vs. Aberdeen Global High
Performance |
| Timeline |
| Aberdeen China Oppty |
| Aberdeen Global High |
Aberdeen China and Aberdeen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen China and Aberdeen Global
The main advantage of trading using opposite Aberdeen China and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen China position performs unexpectedly, Aberdeen Global 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 Global will offset losses from the drop in Aberdeen Global's long position.| Aberdeen China vs. Intal High Relative | Aberdeen China vs. Tfa Alphagen Growth | Aberdeen China vs. Gmo Quality Fund | Aberdeen China vs. Qs Large Cap |
| Aberdeen Global vs. Artisan High Income | Aberdeen Global vs. Lord Abbett Short | Aberdeen Global vs. Guggenheim High Yield | Aberdeen Global vs. Fidelity Capital Income |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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