Correlation Between Aberdeen Small and Aberdeen China
Can any of the company-specific risk be diversified away by investing in both Aberdeen Small and Aberdeen China 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 Small and Aberdeen China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Small Cap and Aberdeen China Oppty, you can compare the effects of market volatilities on Aberdeen Small and Aberdeen China 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 Small with a short position of Aberdeen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Small and Aberdeen China.
Diversification Opportunities for Aberdeen Small and Aberdeen China
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aberdeen and Aberdeen is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Small Cap and Aberdeen China Oppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen China Oppty and Aberdeen Small 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 Small Cap are associated (or correlated) with Aberdeen China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen China Oppty has no effect on the direction of Aberdeen Small i.e., Aberdeen Small and Aberdeen China go up and down completely randomly.
Pair Corralation between Aberdeen Small and Aberdeen China
Assuming the 90 days horizon Aberdeen Small Cap is expected to generate 1.16 times more return on investment than Aberdeen China. However, Aberdeen Small is 1.16 times more volatile than Aberdeen China Oppty. It trades about 0.35 of its potential returns per unit of risk. Aberdeen China Oppty is currently generating about 0.1 per unit of risk. If you would invest 3,569 in Aberdeen Small Cap on November 3, 2024 and sell it today you would earn a total of 308.00 from holding Aberdeen Small Cap or generate 8.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Small Cap vs. Aberdeen China Oppty
Performance |
| Timeline |
| Aberdeen Small Cap |
| Aberdeen China Oppty |
Aberdeen Small and Aberdeen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Small and Aberdeen China
The main advantage of trading using opposite Aberdeen Small and Aberdeen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Small position performs unexpectedly, Aberdeen China 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 China will offset losses from the drop in Aberdeen China's long position.| Aberdeen Small vs. Ab Small Cap | Aberdeen Small vs. Mutual Of America | Aberdeen Small vs. Ultrasmall Cap Profund Ultrasmall Cap | Aberdeen Small vs. Fidelity Small Cap |
| Aberdeen China vs. Dunham High Yield | Aberdeen China vs. Strategic Advisers Income | Aberdeen China vs. Simt High Yield | Aberdeen China vs. Gmo High Yield |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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