Correlation Between Invesco Gold and Aberdeen China
Can any of the company-specific risk be diversified away by investing in both Invesco Gold 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 Invesco Gold and Aberdeen China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Gold Special and Aberdeen China Oppty, you can compare the effects of market volatilities on Invesco Gold 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 Invesco Gold with a short position of Aberdeen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Gold and Aberdeen China.
Diversification Opportunities for Invesco Gold and Aberdeen China
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Aberdeen is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Gold Special 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 Invesco Gold 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 Invesco Gold Special 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 Invesco Gold i.e., Invesco Gold and Aberdeen China go up and down completely randomly.
Pair Corralation between Invesco Gold and Aberdeen China
Assuming the 90 days horizon Invesco Gold Special is expected to under-perform the Aberdeen China. In addition to that, Invesco Gold is 1.03 times more volatile than Aberdeen China Oppty. It trades about -0.2 of its total potential returns per unit of risk. Aberdeen China Oppty is currently generating about -0.08 per unit of volatility. If you would invest 2,325 in Aberdeen China Oppty on August 30, 2024 and sell it today you would lose (92.00) from holding Aberdeen China Oppty or give up 3.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Gold Special vs. Aberdeen China Oppty
Performance |
| Timeline |
| Invesco Gold Special |
| Aberdeen China Oppty |
Invesco Gold and Aberdeen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Gold and Aberdeen China
The main advantage of trading using opposite Invesco Gold and Aberdeen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Gold 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.| Invesco Gold vs. Ab Bond Inflation | Invesco Gold vs. T Rowe Price | Invesco Gold vs. Arrow Managed Futures | Invesco Gold vs. Barings Emerging Markets |
| Aberdeen China vs. L Abbett Growth | Aberdeen China vs. Growth Fund Of | Aberdeen China vs. Ancorathelen Small Mid Cap | Aberdeen China vs. Eip Growth And |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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