Correlation Between Clough Global and Aberdeen Income

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

By analyzing existing cross correlation between Clough Global Allocation and Aberdeen Income Credit, you can compare the effects of market volatilities on Clough Global and Aberdeen Income 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 Clough Global with a short position of Aberdeen Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clough Global and Aberdeen Income.

Diversification Opportunities for Clough Global and Aberdeen Income

0.95

Correlation Coefficient

Clough Global  Aberdeen Income

Almost no diversification

The 3 months correlation between Clough and Aberdeen is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Clough Global Allocation and Aberdeen Income Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Income Credit and Clough Global 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 Clough Global Allocation are associated (or correlated) with Aberdeen Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Income Credit has no effect on the direction of Clough Global i.e., Clough Global and Aberdeen Income go up and down completely randomly.

Pair Corralation between Clough Global and Aberdeen Income

Considering the 90-day investment horizon Clough Global is expected to generate 1.4 times less return on investment than Aberdeen Income. But when comparing it to its historical volatility, Clough Global Allocation is 1.26 times less risky than Aberdeen Income. It trades about 0.25 of its potential returns per unit of risk. Aberdeen Income Credit is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  545.00  in Aberdeen Income Credit on May 7, 2025 and sell it today you would earn a total of  51.00  from holding Aberdeen Income Credit or generate 9.36% return on investment over 90 days.

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

Clough Global Allocation  vs.  Aberdeen Income Credit

Clough Global Allocation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clough Global Allocation are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Clough Global may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Aberdeen Income Credit

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Income Credit are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively fragile fundamental indicators, Aberdeen Income may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Clough Global and Aberdeen Income

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

The idea behind Clough Global Allocation and Aberdeen Income Credit 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.