Correlation Between Abrdn Physical and Abrdn Physical

Can any of the company-specific risk be diversified away by investing in both Abrdn Physical and Abrdn Physical 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 Physical and Abrdn Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between abrdn Physical Palladium and abrdn Physical Precious, you can compare the effects of market volatilities on Abrdn Physical and Abrdn Physical 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 Physical with a short position of Abrdn Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Physical and Abrdn Physical.

Diversification Opportunities for Abrdn Physical and Abrdn Physical

0.64

Correlation Coefficient

Abrdn Physical  Abrdn Physical

Poor diversification

The 3 months correlation between Abrdn and Abrdn is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Physical Palladium and abrdn Physical Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn Physical Precious and Abrdn Physical 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 Physical Palladium are associated (or correlated) with Abrdn Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn Physical Precious has no effect on the direction of Abrdn Physical i.e., Abrdn Physical and Abrdn Physical go up and down completely randomly.

Pair Corralation between Abrdn Physical and Abrdn Physical

Given the investment horizon of 90 days abrdn Physical Palladium is expected to under-perform the Abrdn Physical. In addition to that, Abrdn Physical is 1.72 times more volatile than abrdn Physical Precious. It trades about -0.12 of its total potential returns per unit of risk. abrdn Physical Precious is currently generating about -0.06 per unit of volatility. If you would invest  10,100  in abrdn Physical Precious on February 5, 2024 and sell it today you would lose (180.00) from holding abrdn Physical Precious or give up 1.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

abrdn Physical Palladium  vs.  abrdn Physical Precious

abrdn Physical Palladium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days abrdn Physical Palladium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Abrdn Physical is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

abrdn Physical Precious

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn Physical Precious are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Abrdn Physical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Abrdn Physical and Abrdn Physical

The main advantage of trading using opposite Abrdn Physical and Abrdn Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Physical position performs unexpectedly, Abrdn Physical 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 Abrdn Physical will offset losses from the drop in Abrdn Physical's long position.

The idea behind abrdn Physical Palladium and abrdn Physical Precious 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.

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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.