Correlation Between Global Core and Aberdeen Global
Can any of the company-specific risk be diversified away by investing in both Global Core 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 Global Core and Aberdeen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global E Portfolio and Aberdeen Global Premier, you can compare the effects of market volatilities on Global Core 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 Global Core with a short position of Aberdeen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Core and Aberdeen Global.
Diversification Opportunities for Global Core and Aberdeen Global
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Aberdeen is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Global E Portfolio and Aberdeen Global Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global Premier and Global Core 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 Global E Portfolio 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 Premier has no effect on the direction of Global Core i.e., Global Core and Aberdeen Global go up and down completely randomly.
Pair Corralation between Global Core and Aberdeen Global
Assuming the 90 days horizon Global E Portfolio is expected to generate 0.58 times more return on investment than Aberdeen Global. However, Global E Portfolio is 1.73 times less risky than Aberdeen Global. It trades about 0.2 of its potential returns per unit of risk. Aberdeen Global Premier is currently generating about 0.05 per unit of risk. If you would invest 2,032 in Global E Portfolio on September 3, 2024 and sell it today you would earn a total of 122.00 from holding Global E Portfolio or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global E Portfolio vs. Aberdeen Global Premier
Performance |
| Timeline |
| Global E Portfolio |
| Aberdeen Global Premier |
Global Core and Aberdeen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Core and Aberdeen Global
The main advantage of trading using opposite Global Core and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Core 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.| Global Core vs. Health Biotchnology Portfolio | Global Core vs. Alphacentric Lifesci Healthcare | Global Core vs. Highland Longshort Healthcare | Global Core vs. Fidelity Advisor Health |
| Aberdeen Global vs. Tekla Healthcare Investors | Aberdeen Global vs. Tekla Life Sciences | Aberdeen Global vs. Cohen Steers Reit | Aberdeen Global vs. XAI Octagon Floating |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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