Correlation Between Supermarket Income and Aberdeen Diversified
Can any of the company-specific risk be diversified away by investing in both Supermarket Income and Aberdeen Diversified 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 Supermarket Income and Aberdeen Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supermarket Income REIT and Aberdeen Diversified Income, you can compare the effects of market volatilities on Supermarket Income and Aberdeen Diversified 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 Supermarket Income with a short position of Aberdeen Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and Aberdeen Diversified.
Diversification Opportunities for Supermarket Income and Aberdeen Diversified
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Supermarket and Aberdeen is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and Aberdeen Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Diversified and Supermarket Income 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 Supermarket Income REIT are associated (or correlated) with Aberdeen Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Diversified has no effect on the direction of Supermarket Income i.e., Supermarket Income and Aberdeen Diversified go up and down completely randomly.
Pair Corralation between Supermarket Income and Aberdeen Diversified
Assuming the 90 days trading horizon Supermarket Income REIT is expected to under-perform the Aberdeen Diversified. In addition to that, Supermarket Income is 1.4 times more volatile than Aberdeen Diversified Income. It trades about -0.3 of its total potential returns per unit of risk. Aberdeen Diversified Income is currently generating about 0.18 per unit of volatility. If you would invest 4,300 in Aberdeen Diversified Income on October 13, 2024 and sell it today you would earn a total of 120.00 from holding Aberdeen Diversified Income or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supermarket Income REIT vs. Aberdeen Diversified Income
Performance |
| Timeline |
| Supermarket Income REIT |
| Aberdeen Diversified |
Supermarket Income and Aberdeen Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supermarket Income and Aberdeen Diversified
The main advantage of trading using opposite Supermarket Income and Aberdeen Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermarket Income position performs unexpectedly, Aberdeen Diversified 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 Diversified will offset losses from the drop in Aberdeen Diversified's long position.| Supermarket Income vs. Impax Asset Management | Supermarket Income vs. Bankers Investment Trust | Supermarket Income vs. Zegona Communications Plc | Supermarket Income vs. Deltex Medical Group |
| Aberdeen Diversified vs. BH Macro Limited | Aberdeen Diversified vs. Intermediate Capital Group | Aberdeen Diversified vs. FC Investment Trust | Aberdeen Diversified vs. Polar Capital Technology |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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