Correlation Between Aberdeen Gbl and Aberdeen Select
Can any of the company-specific risk be diversified away by investing in both Aberdeen Gbl and Aberdeen Select 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 Aberdeen Select 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 Aberdeen Select International, you can compare the effects of market volatilities on Aberdeen Gbl and Aberdeen Select 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 Aberdeen Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Gbl and Aberdeen Select.
Diversification Opportunities for Aberdeen Gbl and Aberdeen Select
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aberdeen and Aberdeen is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Gbl Eq and Aberdeen Select International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Select Inte 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 Aberdeen Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Select Inte has no effect on the direction of Aberdeen Gbl i.e., Aberdeen Gbl and Aberdeen Select go up and down completely randomly.
Pair Corralation between Aberdeen Gbl and Aberdeen Select
Assuming the 90 days horizon Aberdeen Gbl Eq is expected to generate 1.06 times more return on investment than Aberdeen Select. However, Aberdeen Gbl is 1.06 times more volatile than Aberdeen Select International. It trades about -0.08 of its potential returns per unit of risk. Aberdeen Select International is currently generating about -0.13 per unit of risk. If you would invest 1,275 in Aberdeen Gbl Eq on August 28, 2024 and sell it today you would lose (16.00) from holding Aberdeen Gbl Eq or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aberdeen Gbl Eq vs. Aberdeen Select International
Performance |
| Timeline |
| Aberdeen Gbl Eq |
| Aberdeen Select Inte |
Aberdeen Gbl and Aberdeen Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Gbl and Aberdeen Select
The main advantage of trading using opposite Aberdeen Gbl and Aberdeen Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Gbl position performs unexpectedly, Aberdeen Select 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 Select will offset losses from the drop in Aberdeen Select's long position.| Aberdeen Gbl vs. Columbia Seligman Premium | Aberdeen Gbl vs. Aberdeen Global Fixed | Aberdeen Gbl vs. Aberdeen Equity A | Aberdeen Gbl vs. Aberdeen Multi Cap Equity |
| Aberdeen Select vs. Marsico 21st Century | Aberdeen Select vs. Harbor International Fund | Aberdeen Select vs. Loomis Sayles Bond | Aberdeen Select vs. Northern Small Cap |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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