Correlation Between Templeton Dragon and Aberdeen Global
Can any of the company-specific risk be diversified away by investing in both Templeton Dragon 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 Templeton Dragon and Aberdeen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Dragon Closed and Aberdeen Global Dynamic, you can compare the effects of market volatilities on Templeton Dragon 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 Templeton Dragon with a short position of Aberdeen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Dragon and Aberdeen Global.
Diversification Opportunities for Templeton Dragon and Aberdeen Global
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Templeton and Aberdeen is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Dragon Closed and Aberdeen Global Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global Dynamic and Templeton Dragon 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 Templeton Dragon Closed 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 Dynamic has no effect on the direction of Templeton Dragon i.e., Templeton Dragon and Aberdeen Global go up and down completely randomly.
Pair Corralation between Templeton Dragon and Aberdeen Global
Considering the 90-day investment horizon Templeton Dragon Closed is expected to under-perform the Aberdeen Global. In addition to that, Templeton Dragon is 2.94 times more volatile than Aberdeen Global Dynamic. It trades about -0.19 of its total potential returns per unit of risk. Aberdeen Global Dynamic is currently generating about -0.04 per unit of volatility. If you would invest 1,023 in Aberdeen Global Dynamic on August 28, 2024 and sell it today you would lose (6.00) from holding Aberdeen Global Dynamic or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Dragon Closed vs. Aberdeen Global Dynamic
Performance |
| Timeline |
| Templeton Dragon Closed |
| Aberdeen Global Dynamic |
Templeton Dragon and Aberdeen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Dragon and Aberdeen Global
The main advantage of trading using opposite Templeton Dragon and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Dragon 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.| Templeton Dragon vs. Nuveen Municipalome | Templeton Dragon vs. Western Asset Investment | Templeton Dragon vs. Templeton Emerging Markets | Templeton Dragon vs. Tekla Life Sciences |
| Aberdeen Global vs. Allianzgi Convertible Income | Aberdeen Global vs. MFS Investment Grade | Aberdeen Global vs. Eaton Vance Senior | Aberdeen Global vs. Stone Harbor Emerging |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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