Correlation Between Abrdn Bloomberg and First Trust
Can any of the company-specific risk be diversified away by investing in both Abrdn Bloomberg and First Trust 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 Abrdn Bloomberg and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between abrdn Bloomberg All and First Trust Global, you can compare the effects of market volatilities on Abrdn Bloomberg and First Trust 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 Abrdn Bloomberg with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Bloomberg and First Trust.
Diversification Opportunities for Abrdn Bloomberg and First Trust
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Abrdn and First is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Bloomberg All and First Trust Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Global and Abrdn Bloomberg 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 abrdn Bloomberg All are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Global has no effect on the direction of Abrdn Bloomberg i.e., Abrdn Bloomberg and First Trust go up and down completely randomly.
Pair Corralation between Abrdn Bloomberg and First Trust
Considering the 90-day investment horizon abrdn Bloomberg All is expected to generate 1.0 times more return on investment than First Trust. However, abrdn Bloomberg All is 1.0 times less risky than First Trust. It trades about 0.27 of its potential returns per unit of risk. First Trust Global is currently generating about 0.21 per unit of risk. If you would invest 3,147 in abrdn Bloomberg All on January 20, 2024 and sell it today you would earn a total of 100.00 from holding abrdn Bloomberg All or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
abrdn Bloomberg All vs. First Trust Global
Performance |
| Timeline |
| abrdn Bloomberg All |
| First Trust Global |
Abrdn Bloomberg and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abrdn Bloomberg and First Trust
The main advantage of trading using opposite Abrdn Bloomberg and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Bloomberg position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Abrdn Bloomberg vs. abrdn Bloomberg All | Abrdn Bloomberg vs. iShares Bloomberg Roll | Abrdn Bloomberg vs. GraniteShares Bloomberg Commodity | Abrdn Bloomberg vs. iShares GSCI Commodity |
| First Trust vs. iShares GSCI Commodity | First Trust vs. Invesco Optimum Yield | First Trust vs. First Trust Senior | First Trust vs. First Trust Capital |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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