Correlation Between Locorr Market and Aberdeen Emerging
Can any of the company-specific risk be diversified away by investing in both Locorr Market 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 Locorr Market and Aberdeen Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Locorr Market Trend and Aberdeen Emerging Markets, you can compare the effects of market volatilities on Locorr Market 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 Locorr Market with a short position of Aberdeen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locorr Market and Aberdeen Emerging.
Diversification Opportunities for Locorr Market and Aberdeen Emerging
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Locorr and Aberdeen is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Locorr Market Trend 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 Locorr Market 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 Locorr Market Trend 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 Locorr Market i.e., Locorr Market and Aberdeen Emerging go up and down completely randomly.
Pair Corralation between Locorr Market and Aberdeen Emerging
Assuming the 90 days horizon Locorr Market Trend is expected to generate 0.78 times more return on investment than Aberdeen Emerging. However, Locorr Market Trend is 1.28 times less risky than Aberdeen Emerging. It trades about 0.16 of its potential returns per unit of risk. Aberdeen Emerging Markets is currently generating about -0.1 per unit of risk. If you would invest 1,070 in Locorr Market Trend on September 12, 2024 and sell it today you would earn a total of 19.00 from holding Locorr Market Trend or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Locorr Market Trend vs. Aberdeen Emerging Markets
Performance |
| Timeline |
| Locorr Market Trend |
| Aberdeen Emerging Markets |
Locorr Market and Aberdeen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Locorr Market and Aberdeen Emerging
The main advantage of trading using opposite Locorr Market and Aberdeen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Locorr Market 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.| Locorr Market vs. Pimco Trends Managed | Locorr Market vs. Pimco Trends Managed | Locorr Market vs. SCOR PK | Locorr Market vs. Morningstar Unconstrained Allocation |
| Aberdeen Emerging vs. Locorr Market Trend | Aberdeen Emerging vs. Extended Market Index | Aberdeen Emerging vs. Kinetics Market Opportunities | Aberdeen Emerging vs. Shelton Emerging Markets |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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