Correlation Between Arrow Managed and Aberdeen Global
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Aberdeen Global 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 Arrow Managed and Aberdeen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Aberdeen Global Small, you can compare the effects of market volatilities on Arrow Managed and Aberdeen Global 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 Arrow Managed with a short position of Aberdeen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Aberdeen Global.
Diversification Opportunities for Arrow Managed and Aberdeen Global
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arrow and Aberdeen is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Aberdeen Global Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global Small and Arrow Managed 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 Arrow Managed Futures are associated (or correlated) with Aberdeen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Global Small has no effect on the direction of Arrow Managed i.e., Arrow Managed and Aberdeen Global go up and down completely randomly.
Pair Corralation between Arrow Managed and Aberdeen Global
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 1.65 times more return on investment than Aberdeen Global. However, Arrow Managed is 1.65 times more volatile than Aberdeen Global Small. It trades about 0.31 of its potential returns per unit of risk. Aberdeen Global Small is currently generating about 0.14 per unit of risk. If you would invest 543.00 in Arrow Managed Futures on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Arrow Managed Futures or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Arrow Managed Futures vs. Aberdeen Global Small
Performance |
| Timeline |
| Arrow Managed Futures |
| Aberdeen Global Small |
Arrow Managed and Aberdeen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Aberdeen Global
The main advantage of trading using opposite Arrow Managed and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Aberdeen Global 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 Global will offset losses from the drop in Aberdeen Global's long position.| Arrow Managed vs. 1919 Financial Services | Arrow Managed vs. Davis Financial Fund | Arrow Managed vs. Vanguard Financials Index | Arrow Managed vs. Prudential Jennison Financial |
| Aberdeen Global vs. Aberdeen Emerging Markets | Aberdeen Global vs. Aberdeen Emerging Markets | Aberdeen Global vs. Aberdeen Emerging Markets | Aberdeen Global vs. Aberdeen Gbl Eq |
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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