Correlation Between Aberdeen Select and Champlain Small
Can any of the company-specific risk be diversified away by investing in both Aberdeen Select and Champlain Small 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 Select and Champlain Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Select International and Champlain Small, you can compare the effects of market volatilities on Aberdeen Select and Champlain Small 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 Select with a short position of Champlain Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Select and Champlain Small.
Diversification Opportunities for Aberdeen Select and Champlain Small
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aberdeen and Champlain is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Select International and Champlain Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champlain Small and Aberdeen Select 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 Select International are associated (or correlated) with Champlain Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champlain Small has no effect on the direction of Aberdeen Select i.e., Aberdeen Select and Champlain Small go up and down completely randomly.
Pair Corralation between Aberdeen Select and Champlain Small
Assuming the 90 days horizon Aberdeen Select International is expected to generate 0.71 times more return on investment than Champlain Small. However, Aberdeen Select International is 1.42 times less risky than Champlain Small. It trades about 0.14 of its potential returns per unit of risk. Champlain Small is currently generating about 0.06 per unit of risk. If you would invest 1,426 in Aberdeen Select International on October 20, 2024 and sell it today you would earn a total of 24.00 from holding Aberdeen Select International or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Select International vs. Champlain Small
Performance |
| Timeline |
| Aberdeen Select Inte |
| Champlain Small |
Aberdeen Select and Champlain Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Select and Champlain Small
The main advantage of trading using opposite Aberdeen Select and Champlain Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Select position performs unexpectedly, Champlain Small 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 Champlain Small will offset losses from the drop in Champlain Small's long position.| Aberdeen Select vs. Marsico 21st Century | Aberdeen Select vs. Harbor International Fund | Aberdeen Select vs. Loomis Sayles Bond | Aberdeen Select vs. Northern Small Cap |
| Champlain Small vs. The Hartford Midcap | Champlain Small vs. Mfs Emerging Markets | Champlain Small vs. Wells Fargo Special | Champlain Small vs. Washington Mutual Investors |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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