Correlation Between Aberdeen Gbl and Ab Global
Can any of the company-specific risk be diversified away by investing in both Aberdeen Gbl and Ab 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 Gbl and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Gbl Eq and Ab Global Real, you can compare the effects of market volatilities on Aberdeen Gbl and Ab 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 Gbl with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Gbl and Ab Global.
Diversification Opportunities for Aberdeen Gbl and Ab Global
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aberdeen and ARECX is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Gbl Eq and Ab Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Real and Aberdeen Gbl 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 Gbl Eq are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Real has no effect on the direction of Aberdeen Gbl i.e., Aberdeen Gbl and Ab Global go up and down completely randomly.
Pair Corralation between Aberdeen Gbl and Ab Global
Assuming the 90 days horizon Aberdeen Gbl is expected to generate 1.5 times less return on investment than Ab Global. But when comparing it to its historical volatility, Aberdeen Gbl Eq is 1.17 times less risky than Ab Global. It trades about 0.04 of its potential returns per unit of risk. Ab Global Real is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,299 in Ab Global Real on September 4, 2024 and sell it today you would earn a total of 215.00 from holding Ab Global Real or generate 16.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Gbl Eq vs. Ab Global Real
Performance |
| Timeline |
| Aberdeen Gbl Eq |
| Ab Global Real |
Aberdeen Gbl and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Gbl and Ab Global
The main advantage of trading using opposite Aberdeen Gbl and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Gbl position performs unexpectedly, Ab 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 Ab Global will offset losses from the drop in Ab Global's long position.| Aberdeen Gbl vs. Boston Partners Small | Aberdeen Gbl vs. Fpa Queens Road | Aberdeen Gbl vs. Ab Discovery Value | Aberdeen Gbl vs. Hennessy Nerstone Mid |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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