Correlation Between Western Asset and Aberdeen Standard
Can any of the company-specific risk be diversified away by investing in both Western Asset and Aberdeen Standard 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 Western Asset and Aberdeen Standard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and Aberdeen Standard Global, you can compare the effects of market volatilities on Western Asset and Aberdeen Standard 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 Western Asset with a short position of Aberdeen Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Aberdeen Standard.
Diversification Opportunities for Western Asset and Aberdeen Standard
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Aberdeen is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Aberdeen Standard Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Standard Global and Western Asset 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 Western Asset Diversified are associated (or correlated) with Aberdeen Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Standard Global has no effect on the direction of Western Asset i.e., Western Asset and Aberdeen Standard go up and down completely randomly.
Pair Corralation between Western Asset and Aberdeen Standard
Considering the 90-day investment horizon Western Asset Diversified is expected to generate 0.78 times more return on investment than Aberdeen Standard. However, Western Asset Diversified is 1.28 times less risky than Aberdeen Standard. It trades about 0.1 of its potential returns per unit of risk. Aberdeen Standard Global is currently generating about 0.07 per unit of risk. If you would invest 1,064 in Western Asset Diversified on August 31, 2024 and sell it today you would earn a total of 429.00 from holding Western Asset Diversified or generate 40.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Western Asset Diversified vs. Aberdeen Standard Global
Performance |
| Timeline |
| Western Asset Diversified |
| Aberdeen Standard Global |
Western Asset and Aberdeen Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Aberdeen Standard
The main advantage of trading using opposite Western Asset and Aberdeen Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Aberdeen Standard 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 Standard will offset losses from the drop in Aberdeen Standard's long position.| Western Asset vs. Neuberger Berman Next | Western Asset vs. Doubleline Yield Opportunities | Western Asset vs. PIMCO Access Income | Western Asset vs. Blackrock Innovation Growth |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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