Correlation Between Pender Real and Aberdeen Emerging
Can any of the company-specific risk be diversified away by investing in both Pender Real 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 Pender Real and Aberdeen Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pender Real Estate and Aberdeen Emerging Markets, you can compare the effects of market volatilities on Pender Real 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 Pender Real with a short position of Aberdeen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pender Real and Aberdeen Emerging.
Diversification Opportunities for Pender Real and Aberdeen Emerging
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pender and Aberdeen is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Pender Real Estate 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 Pender Real 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 Pender Real Estate 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 Pender Real i.e., Pender Real and Aberdeen Emerging go up and down completely randomly.
Pair Corralation between Pender Real and Aberdeen Emerging
Assuming the 90 days horizon Pender Real Estate is expected to generate 0.12 times more return on investment than Aberdeen Emerging. However, Pender Real Estate is 8.31 times less risky than Aberdeen Emerging. It trades about 0.13 of its potential returns per unit of risk. Aberdeen Emerging Markets is currently generating about -0.13 per unit of risk. If you would invest 1,000.00 in Pender Real Estate on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Pender Real Estate or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pender Real Estate vs. Aberdeen Emerging Markets
Performance |
| Timeline |
| Pender Real Estate |
| Aberdeen Emerging Markets |
Pender Real and Aberdeen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pender Real and Aberdeen Emerging
The main advantage of trading using opposite Pender Real and Aberdeen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pender Real 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.| Pender Real vs. Ab Global Risk | Pender Real vs. Calvert High Yield | Pender Real vs. Alliancebernstein Global High | Pender Real vs. Ab High Income |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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