Correlation Between Limited Term and Aberdeen China
Can any of the company-specific risk be diversified away by investing in both Limited Term and Aberdeen China 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 Limited Term and Aberdeen China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Limited Term Tax and Aberdeen China Oppty, you can compare the effects of market volatilities on Limited Term and Aberdeen China 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 Limited Term with a short position of Aberdeen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Limited Term and Aberdeen China.
Diversification Opportunities for Limited Term and Aberdeen China
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between LIMITED and Aberdeen is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Limited Term Tax and Aberdeen China Oppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen China Oppty and Limited Term 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 Limited Term Tax are associated (or correlated) with Aberdeen China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen China Oppty has no effect on the direction of Limited Term i.e., Limited Term and Aberdeen China go up and down completely randomly.
Pair Corralation between Limited Term and Aberdeen China
Assuming the 90 days horizon Limited Term Tax is expected to generate 0.1 times more return on investment than Aberdeen China. However, Limited Term Tax is 9.61 times less risky than Aberdeen China. It trades about 0.09 of its potential returns per unit of risk. Aberdeen China Oppty is currently generating about -0.03 per unit of risk. If you would invest 1,451 in Limited Term Tax on September 3, 2024 and sell it today you would earn a total of 93.00 from holding Limited Term Tax or generate 6.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Limited Term Tax vs. Aberdeen China Oppty
Performance |
| Timeline |
| Limited Term Tax |
| Aberdeen China Oppty |
Limited Term and Aberdeen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Limited Term and Aberdeen China
The main advantage of trading using opposite Limited Term and Aberdeen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Limited Term position performs unexpectedly, Aberdeen China 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 China will offset losses from the drop in Aberdeen China's long position.| Limited Term vs. Tax Exempt Bond | Limited Term vs. American High Income Municipal | Limited Term vs. Us Government Securities | Limited Term vs. HUMANA INC |
| Aberdeen China vs. Maryland Short Term Tax Free | Aberdeen China vs. Calvert Short Duration | Aberdeen China vs. Touchstone Ultra Short | Aberdeen China vs. Limited Term Tax |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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