Correlation Between Multisector Bond and Aberdeen Emerging
Can any of the company-specific risk be diversified away by investing in both Multisector Bond 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 Multisector Bond and Aberdeen Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multisector Bond Sma and Aberdeen Emerging Markets, you can compare the effects of market volatilities on Multisector Bond 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 Multisector Bond with a short position of Aberdeen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multisector Bond and Aberdeen Emerging.
Diversification Opportunities for Multisector Bond and Aberdeen Emerging
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Multisector and Aberdeen is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Multisector Bond Sma 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 Multisector Bond 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 Multisector Bond Sma 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 Multisector Bond i.e., Multisector Bond and Aberdeen Emerging go up and down completely randomly.
Pair Corralation between Multisector Bond and Aberdeen Emerging
Assuming the 90 days horizon Multisector Bond Sma is expected to generate 0.3 times more return on investment than Aberdeen Emerging. However, Multisector Bond Sma is 3.34 times less risky than Aberdeen Emerging. It trades about 0.18 of its potential returns per unit of risk. Aberdeen Emerging Markets is currently generating about -0.05 per unit of risk. If you would invest 1,365 in Multisector Bond Sma on September 12, 2024 and sell it today you would earn a total of 11.00 from holding Multisector Bond Sma or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Multisector Bond Sma vs. Aberdeen Emerging Markets
Performance |
| Timeline |
| Multisector Bond Sma |
| Aberdeen Emerging Markets |
Multisector Bond and Aberdeen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multisector Bond and Aberdeen Emerging
The main advantage of trading using opposite Multisector Bond and Aberdeen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multisector Bond 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.| Multisector Bond vs. SCOR PK | Multisector Bond vs. Morningstar Unconstrained Allocation | Multisector Bond vs. Thrivent High Yield | Multisector Bond vs. Via Renewables |
| Aberdeen Emerging vs. Putnman Retirement Ready | Aberdeen Emerging vs. Jp Morgan Smartretirement | Aberdeen Emerging vs. Strategic Allocation Moderate | Aberdeen Emerging vs. Jpmorgan Smartretirement 2035 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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