Correlation Between Aberdeen Gbl and Aberdeen Equity
Can any of the company-specific risk be diversified away by investing in both Aberdeen Gbl and Aberdeen Equity 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 Equity 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 Equity A, you can compare the effects of market volatilities on Aberdeen Gbl and Aberdeen Equity 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 Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Gbl and Aberdeen Equity.
Diversification Opportunities for Aberdeen Gbl and Aberdeen Equity
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aberdeen and Aberdeen is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Gbl Eq and Aberdeen Equity A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Equity A 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 Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Equity A has no effect on the direction of Aberdeen Gbl i.e., Aberdeen Gbl and Aberdeen Equity go up and down completely randomly.
Pair Corralation between Aberdeen Gbl and Aberdeen Equity
Assuming the 90 days horizon Aberdeen Gbl is expected to generate 4.69 times less return on investment than Aberdeen Equity. In addition to that, Aberdeen Gbl is 1.18 times more volatile than Aberdeen Equity A. It trades about 0.01 of its total potential returns per unit of risk. Aberdeen Equity A is currently generating about 0.07 per unit of volatility. If you would invest 1,166 in Aberdeen Equity A on August 29, 2024 and sell it today you would earn a total of 79.00 from holding Aberdeen Equity A or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Gbl Eq vs. Aberdeen Equity A
Performance |
| Timeline |
| Aberdeen Gbl Eq |
| Aberdeen Equity A |
Aberdeen Gbl and Aberdeen Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Gbl and Aberdeen Equity
The main advantage of trading using opposite Aberdeen Gbl and Aberdeen Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Gbl position performs unexpectedly, Aberdeen Equity 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 Equity will offset losses from the drop in Aberdeen Equity's long position.| Aberdeen Gbl vs. Barings Emerging Markets | Aberdeen Gbl vs. Shelton Emerging Markets | Aberdeen Gbl vs. Ep Emerging Markets | Aberdeen Gbl vs. Dodge Cox Emerging |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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