Correlation Between Prudential High and Aberdeen Global
Can any of the company-specific risk be diversified away by investing in both Prudential High 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 Prudential High and Aberdeen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential High Yield and Aberdeen Global High, you can compare the effects of market volatilities on Prudential High 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 Prudential High with a short position of Aberdeen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential High and Aberdeen Global.
Diversification Opportunities for Prudential High and Aberdeen Global
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Prudential and Aberdeen is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Prudential High Yield and Aberdeen Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global High and Prudential High 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 Prudential High Yield 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 High has no effect on the direction of Prudential High i.e., Prudential High and Aberdeen Global go up and down completely randomly.
Pair Corralation between Prudential High and Aberdeen Global
Assuming the 90 days horizon Prudential High is expected to generate 2.65 times less return on investment than Aberdeen Global. But when comparing it to its historical volatility, Prudential High Yield is 1.52 times less risky than Aberdeen Global. It trades about 0.08 of its potential returns per unit of risk. Aberdeen Global High is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 696.00 in Aberdeen Global High on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Aberdeen Global High or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Prudential High Yield vs. Aberdeen Global High
Performance |
| Timeline |
| Prudential High Yield |
| Aberdeen Global High |
Prudential High and Aberdeen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential High and Aberdeen Global
The main advantage of trading using opposite Prudential High and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential High 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.| Prudential High vs. Prudential Total Return | Prudential High vs. Metropolitan West Total | Prudential High vs. John Hancock Disciplined | Prudential High vs. Europacific Growth Fund |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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