Correlation Between Shenkman Floating and Aberdeen Income
Can any of the company-specific risk be diversified away by investing in both Shenkman Floating and Aberdeen Income 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 Shenkman Floating and Aberdeen Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenkman Floating Rate and Aberdeen Income Credit, you can compare the effects of market volatilities on Shenkman Floating and Aberdeen Income 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 Shenkman Floating with a short position of Aberdeen Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenkman Floating and Aberdeen Income.
Diversification Opportunities for Shenkman Floating and Aberdeen Income
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shenkman and Aberdeen is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shenkman Floating Rate and Aberdeen Income Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Income Credit and Shenkman Floating 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 Shenkman Floating Rate are associated (or correlated) with Aberdeen Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Income Credit has no effect on the direction of Shenkman Floating i.e., Shenkman Floating and Aberdeen Income go up and down completely randomly.
Pair Corralation between Shenkman Floating and Aberdeen Income
Assuming the 90 days horizon Shenkman Floating is expected to generate 8.86 times less return on investment than Aberdeen Income. But when comparing it to its historical volatility, Shenkman Floating Rate is 10.91 times less risky than Aberdeen Income. It trades about 0.52 of its potential returns per unit of risk. Aberdeen Income Credit is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 575.00 in Aberdeen Income Credit on October 20, 2024 and sell it today you would earn a total of 34.00 from holding Aberdeen Income Credit or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenkman Floating Rate vs. Aberdeen Income Credit
Performance |
| Timeline |
| Shenkman Floating Rate |
| Aberdeen Income Credit |
Shenkman Floating and Aberdeen Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenkman Floating and Aberdeen Income
The main advantage of trading using opposite Shenkman Floating and Aberdeen Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenkman Floating position performs unexpectedly, Aberdeen Income 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 Income will offset losses from the drop in Aberdeen Income's long position.| Shenkman Floating vs. Metropolitan West Porate | Shenkman Floating vs. Ab Bond Inflation | Shenkman Floating vs. Artisan High Income | Shenkman Floating vs. Pioneer Amt Free Municipal |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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