Correlation Between NYSE Composite and Aberdeen
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Aberdeen 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 NYSE Composite and Aberdeen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Aberdeen Eq Long Short, you can compare the effects of market volatilities on NYSE Composite and Aberdeen 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 NYSE Composite with a short position of Aberdeen. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Aberdeen.
Diversification Opportunities for NYSE Composite and Aberdeen
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Aberdeen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Aberdeen Eq Long Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Eq Long and NYSE Composite 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 NYSE Composite are associated (or correlated) with Aberdeen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Eq Long has no effect on the direction of NYSE Composite i.e., NYSE Composite and Aberdeen go up and down completely randomly.
Pair Corralation between NYSE Composite and Aberdeen
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.98 times less return on investment than Aberdeen. But when comparing it to its historical volatility, NYSE Composite is 2.31 times less risky than Aberdeen. It trades about 0.24 of its potential returns per unit of risk. Aberdeen Eq Long Short is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 872.00 in Aberdeen Eq Long Short on August 29, 2024 and sell it today you would earn a total of 91.00 from holding Aberdeen Eq Long Short or generate 10.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Aberdeen Eq Long Short
Performance |
| Timeline |
NYSE Composite and Aberdeen Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Aberdeen Eq Long Short
Pair trading matchups for Aberdeen
Pair Trading with NYSE Composite and Aberdeen
The main advantage of trading using opposite NYSE Composite and Aberdeen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Aberdeen 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 will offset losses from the drop in Aberdeen's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Aberdeen vs. Needham Aggressive Growth | Aberdeen vs. Aquagold International | Aberdeen vs. Morningstar Unconstrained Allocation | Aberdeen vs. Thrivent High Yield |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |