Correlation Between Lifestyle and Aberdeen Gbl
Can any of the company-specific risk be diversified away by investing in both Lifestyle 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 Lifestyle and Aberdeen Gbl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifestyle Ii Moderate and Aberdeen Gbl Eq, you can compare the effects of market volatilities on Lifestyle 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 Lifestyle with a short position of Aberdeen Gbl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifestyle and Aberdeen Gbl.
Diversification Opportunities for Lifestyle and Aberdeen Gbl
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lifestyle and Aberdeen is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lifestyle Ii Moderate 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 Lifestyle 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 Lifestyle Ii Moderate 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 Lifestyle i.e., Lifestyle and Aberdeen Gbl go up and down completely randomly.
Pair Corralation between Lifestyle and Aberdeen Gbl
Assuming the 90 days horizon Lifestyle Ii Moderate is expected to generate 0.49 times more return on investment than Aberdeen Gbl. However, Lifestyle Ii Moderate is 2.04 times less risky than Aberdeen Gbl. It trades about 0.37 of its potential returns per unit of risk. Aberdeen Gbl Eq is currently generating about -0.09 per unit of risk. If you would invest 1,095 in Lifestyle Ii Moderate on September 2, 2024 and sell it today you would earn a total of 28.00 from holding Lifestyle Ii Moderate or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifestyle Ii Moderate vs. Aberdeen Gbl Eq
Performance |
| Timeline |
| Lifestyle Ii Moderate |
| Aberdeen Gbl Eq |
Lifestyle and Aberdeen Gbl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifestyle and Aberdeen Gbl
The main advantage of trading using opposite Lifestyle and Aberdeen Gbl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifestyle 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.| Lifestyle vs. Regional Bank Fund | Lifestyle vs. Regional Bank Fund | Lifestyle vs. Multimanager Lifestyle Moderate | Lifestyle vs. Multimanager Lifestyle Balanced |
| Aberdeen Gbl vs. Americafirst Large Cap | Aberdeen Gbl vs. Transamerica Large Cap | Aberdeen Gbl vs. Fidelity Series 1000 | Aberdeen Gbl vs. Tax Managed Large Cap |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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