Correlation Between Aberdeen Select and Aberdeen Gbl
Can any of the company-specific risk be diversified away by investing in both Aberdeen Select and Aberdeen Gbl 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 Gbl 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 Gbl Eq, you can compare the effects of market volatilities on Aberdeen Select and Aberdeen Gbl 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 Gbl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Select and Aberdeen Gbl.
Diversification Opportunities for Aberdeen Select and Aberdeen Gbl
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aberdeen and Aberdeen is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Select International and Aberdeen Gbl Eq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Gbl Eq 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 Gbl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Gbl Eq has no effect on the direction of Aberdeen Select i.e., Aberdeen Select and Aberdeen Gbl go up and down completely randomly.
Pair Corralation between Aberdeen Select and Aberdeen Gbl
Assuming the 90 days horizon Aberdeen Select is expected to generate 2.15 times less return on investment than Aberdeen Gbl. In addition to that, Aberdeen Select is 1.02 times more volatile than Aberdeen Gbl Eq. It trades about 0.03 of its total potential returns per unit of risk. Aberdeen Gbl Eq is currently generating about 0.06 per unit of volatility. If you would invest 1,010 in Aberdeen Gbl Eq on August 28, 2024 and sell it today you would earn a total of 249.00 from holding Aberdeen Gbl Eq or generate 24.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Select International vs. Aberdeen Gbl Eq
Performance |
| Timeline |
| Aberdeen Select Inte |
| Aberdeen Gbl Eq |
Aberdeen Select and Aberdeen Gbl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Select and Aberdeen Gbl
The main advantage of trading using opposite Aberdeen Select and Aberdeen Gbl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Select position performs unexpectedly, Aberdeen Gbl 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 Gbl will offset losses from the drop in Aberdeen Gbl'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 |
| Aberdeen Gbl vs. Columbia Seligman Premium | Aberdeen Gbl vs. Aberdeen Global Fixed | Aberdeen Gbl vs. Aberdeen Equity A | Aberdeen Gbl vs. Aberdeen Multi Cap Equity |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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