Correlation Between Aberdeen Emerging and Aberdeen Select
Can any of the company-specific risk be diversified away by investing in both Aberdeen Emerging and Aberdeen Select 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 Aberdeen Emerging and Aberdeen Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Emerging Markets and Aberdeen Select International, you can compare the effects of market volatilities on Aberdeen Emerging and Aberdeen Select 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 Aberdeen Emerging with a short position of Aberdeen Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Emerging and Aberdeen Select.
Diversification Opportunities for Aberdeen Emerging and Aberdeen Select
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Aberdeen and Aberdeen is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Emerging Markets and Aberdeen Select International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Select Inte and Aberdeen Emerging 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 Aberdeen Emerging Markets are associated (or correlated) with Aberdeen Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Select Inte has no effect on the direction of Aberdeen Emerging i.e., Aberdeen Emerging and Aberdeen Select go up and down completely randomly.
Pair Corralation between Aberdeen Emerging and Aberdeen Select
Assuming the 90 days horizon Aberdeen Emerging Markets is expected to generate 0.93 times more return on investment than Aberdeen Select. However, Aberdeen Emerging Markets is 1.08 times less risky than Aberdeen Select. It trades about 0.09 of its potential returns per unit of risk. Aberdeen Select International is currently generating about 0.09 per unit of risk. If you would invest 1,323 in Aberdeen Emerging Markets on July 5, 2024 and sell it today you would earn a total of 157.00 from holding Aberdeen Emerging Markets or generate 11.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Aberdeen Emerging Markets vs. Aberdeen Select International
Performance |
Timeline |
Aberdeen Emerging Markets |
Aberdeen Select Inte |
Aberdeen Emerging and Aberdeen Select Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aberdeen Emerging and Aberdeen Select
The main advantage of trading using opposite Aberdeen Emerging and Aberdeen Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Emerging position performs unexpectedly, Aberdeen Select 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 Select will offset losses from the drop in Aberdeen Select's long position.Aberdeen Emerging vs. Aberdeen Eq Long Short | Aberdeen Emerging vs. Aberdeen Gbl Eq | Aberdeen Emerging vs. Columbia Seligman Premium | Aberdeen Emerging vs. Aberdeen Global Fixed |
Aberdeen Select vs. William Blair International | Aberdeen Select vs. Artisan International Fund | Aberdeen Select vs. Royce Premier Fund | Aberdeen Select vs. The Jensen Portfolio |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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