Correlation Between Taiwan Closed and Aberdeen Global
Can any of the company-specific risk be diversified away by investing in both Taiwan Closed 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 Taiwan Closed and Aberdeen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Closed and Aberdeen Global Dynamic, you can compare the effects of market volatilities on Taiwan Closed 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 Taiwan Closed with a short position of Aberdeen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Closed and Aberdeen Global.
Diversification Opportunities for Taiwan Closed and Aberdeen Global
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taiwan and Aberdeen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan 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 Taiwan Closed 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 Taiwan 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 Taiwan Closed i.e., Taiwan Closed and Aberdeen Global go up and down completely randomly.
Pair Corralation between Taiwan Closed and Aberdeen Global
Considering the 90-day investment horizon Taiwan Closed is expected to under-perform the Aberdeen Global. In addition to that, Taiwan Closed is 2.13 times more volatile than Aberdeen Global Dynamic. It trades about -0.15 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 |
Taiwan Closed vs. Aberdeen Global Dynamic
Performance |
| Timeline |
| Taiwan Closed |
| Aberdeen Global Dynamic |
Taiwan Closed and Aberdeen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Closed and Aberdeen Global
The main advantage of trading using opposite Taiwan Closed and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Closed 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.| Taiwan Closed vs. Mexico Closed | Taiwan Closed vs. NXG NextGen Infrastructure | Taiwan Closed vs. Central Europe Russia | Taiwan Closed vs. Japan Smaller Capitalization |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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