Correlation Between Aberdeen Australia and Central Europe
Can any of the company-specific risk be diversified away by investing in both Aberdeen Australia and Central Europe 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 Australia and Central Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Australia Ef and Central Europe Russia, you can compare the effects of market volatilities on Aberdeen Australia and Central Europe 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 Australia with a short position of Central Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Australia and Central Europe.
Diversification Opportunities for Aberdeen Australia and Central Europe
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aberdeen and Central is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Australia Ef and Central Europe Russia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Europe Russia and Aberdeen Australia 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 Australia Ef are associated (or correlated) with Central Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Europe Russia has no effect on the direction of Aberdeen Australia i.e., Aberdeen Australia and Central Europe go up and down completely randomly.
Pair Corralation between Aberdeen Australia and Central Europe
Considering the 90-day investment horizon Aberdeen Australia is expected to generate 3.38 times less return on investment than Central Europe. But when comparing it to its historical volatility, Aberdeen Australia Ef is 2.0 times less risky than Central Europe. It trades about 0.22 of its potential returns per unit of risk. Central Europe Russia is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,122 in Central Europe Russia on November 2, 2024 and sell it today you would earn a total of 159.00 from holding Central Europe Russia or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Australia Ef vs. Central Europe Russia
Performance |
| Timeline |
| Aberdeen Australia |
| Central Europe Russia |
Aberdeen Australia and Central Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Australia and Central Europe
The main advantage of trading using opposite Aberdeen Australia and Central Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Australia position performs unexpectedly, Central Europe 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 Central Europe will offset losses from the drop in Central Europe's long position.| Aberdeen Australia vs. Aberdeen Asia Pacific If | Aberdeen Australia vs. Aberdeen Japan Equity | Aberdeen Australia vs. Stone Harbor Emerging | Aberdeen Australia vs. Nuveen Multi Mrkt |
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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 Stocks Directory module to find actively traded stocks across global markets.
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