Correlation Between Aberdeen Select and Aberdeen Emerging
Can any of the company-specific risk be diversified away by investing in both Aberdeen Select and Aberdeen Emerging 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 Aberdeen Emerging 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 Aberdeen Emerging Markets, you can compare the effects of market volatilities on Aberdeen Select and Aberdeen Emerging 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 Aberdeen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Select and Aberdeen Emerging.
Diversification Opportunities for Aberdeen Select and Aberdeen Emerging
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 Select International and Aberdeen Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Emerging Markets 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 Aberdeen Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Emerging Markets has no effect on the direction of Aberdeen Select i.e., Aberdeen Select and Aberdeen Emerging go up and down completely randomly.
Pair Corralation between Aberdeen Select and Aberdeen Emerging
Assuming the 90 days horizon Aberdeen Select International is expected to generate 0.76 times more return on investment than Aberdeen Emerging. However, Aberdeen Select International is 1.32 times less risky than Aberdeen Emerging. It trades about -0.01 of its potential returns per unit of risk. Aberdeen Emerging Markets is currently generating about -0.16 per unit of risk. If you would invest 1,510 in Aberdeen Select International on September 3, 2024 and sell it today you would lose (2.00) from holding Aberdeen Select International or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Select International vs. Aberdeen Emerging Markets
Performance |
| Timeline |
| Aberdeen Select Inte |
| Aberdeen Emerging Markets |
Aberdeen Select and Aberdeen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Select and Aberdeen Emerging
The main advantage of trading using opposite Aberdeen Select and Aberdeen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Select position performs unexpectedly, Aberdeen Emerging 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 Emerging will offset losses from the drop in Aberdeen Emerging's long position.| Aberdeen Select vs. Fpa Queens Road | Aberdeen Select vs. Hennessy Nerstone Mid | Aberdeen Select vs. Mutual Of America | Aberdeen Select vs. Amg River Road |
| Aberdeen Emerging vs. Transamerica Funds | Aberdeen Emerging vs. California High Yield Municipal | Aberdeen Emerging vs. Franklin High Yield | Aberdeen Emerging vs. T Rowe Price |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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