Correlation Between Abrdn Bloomberg and Merrill Lynch
Can any of the company-specific risk be diversified away by investing in both Abrdn Bloomberg and Merrill Lynch 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 Merrill Lynch 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 Merrill Lynch, you can compare the effects of market volatilities on Abrdn Bloomberg and Merrill Lynch 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 Merrill Lynch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Bloomberg and Merrill Lynch.
Diversification Opportunities for Abrdn Bloomberg and Merrill Lynch
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Abrdn and Merrill is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Bloomberg All and Merrill Lynch in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merrill Lynch 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 Merrill Lynch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merrill Lynch has no effect on the direction of Abrdn Bloomberg i.e., Abrdn Bloomberg and Merrill Lynch go up and down completely randomly.
Pair Corralation between Abrdn Bloomberg and Merrill Lynch
If you would invest 3,144 in abrdn Bloomberg All on January 25, 2024 and sell it today you would earn a total of 116.00 from holding abrdn Bloomberg All or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
abrdn Bloomberg All vs. Merrill Lynch
Performance |
| Timeline |
| abrdn Bloomberg All |
| Merrill Lynch |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Abrdn Bloomberg and Merrill Lynch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abrdn Bloomberg and Merrill Lynch
The main advantage of trading using opposite Abrdn Bloomberg and Merrill Lynch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Bloomberg position performs unexpectedly, Merrill Lynch 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 Merrill Lynch will offset losses from the drop in Merrill Lynch's long position.The idea behind abrdn Bloomberg All and Merrill Lynch pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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