Correlation Between Saat Moderate and Aberdeen Gbl
Can any of the company-specific risk be diversified away by investing in both Saat Moderate and Aberdeen Gbl 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 Saat Moderate and Aberdeen Gbl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Moderate Strategy and Aberdeen Gbl Small, you can compare the effects of market volatilities on Saat Moderate and Aberdeen Gbl 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 Saat Moderate with a short position of Aberdeen Gbl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Moderate and Aberdeen Gbl.
Diversification Opportunities for Saat Moderate and Aberdeen Gbl
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saat and Aberdeen is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Saat Moderate Strategy and Aberdeen Gbl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Gbl Small and Saat Moderate 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 Saat Moderate Strategy are associated (or correlated) with Aberdeen Gbl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Gbl Small has no effect on the direction of Saat Moderate i.e., Saat Moderate and Aberdeen Gbl go up and down completely randomly.
Pair Corralation between Saat Moderate and Aberdeen Gbl
Assuming the 90 days horizon Saat Moderate is expected to generate 1.06 times less return on investment than Aberdeen Gbl. But when comparing it to its historical volatility, Saat Moderate Strategy is 3.4 times less risky than Aberdeen Gbl. It trades about 0.13 of its potential returns per unit of risk. Aberdeen Gbl Small is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,718 in Aberdeen Gbl Small on September 15, 2024 and sell it today you would earn a total of 118.00 from holding Aberdeen Gbl Small or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Moderate Strategy vs. Aberdeen Gbl Small
Performance |
| Timeline |
| Saat Moderate Strategy |
| Aberdeen Gbl Small |
Saat Moderate and Aberdeen Gbl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Moderate and Aberdeen Gbl
The main advantage of trading using opposite Saat Moderate and Aberdeen Gbl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Moderate position performs unexpectedly, Aberdeen Gbl 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 Gbl will offset losses from the drop in Aberdeen Gbl's long position.| Saat Moderate vs. Simt Multi Asset Accumulation | Saat Moderate vs. Saat Market Growth | Saat Moderate vs. Simt Real Return | Saat Moderate vs. Simt Small Cap |
| Aberdeen Gbl vs. Calvert Moderate Allocation | Aberdeen Gbl vs. Dimensional Retirement Income | Aberdeen Gbl vs. Saat Moderate Strategy | Aberdeen Gbl vs. Qs Moderate Growth |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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