Correlation Between Aberdeen Global and IE00B0H4TS55

Can any of the company-specific risk be diversified away by investing in both Aberdeen Global and IE00B0H4TS55 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 Global and IE00B0H4TS55 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aberdeen Global Asia and IE00B0H4TS55, you can compare the effects of market volatilities on Aberdeen Global and IE00B0H4TS55 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 Global with a short position of IE00B0H4TS55. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Global and IE00B0H4TS55.

Diversification Opportunities for Aberdeen Global and IE00B0H4TS55

-0.54

Correlation Coefficient

Aberdeen Global  IE00B0H4TS55

Excellent diversification

The 3 months correlation between Aberdeen and IE00B0H4TS55 is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Asia and IE00B0H4TS55 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IE00B0H4TS55 and Aberdeen 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 Aberdeen Global Asia are associated (or correlated) with IE00B0H4TS55. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IE00B0H4TS55 has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and IE00B0H4TS55 go up and down completely randomly.

Pair Corralation between Aberdeen Global and IE00B0H4TS55

Assuming the 90 days trading horizon Aberdeen Global Asia is expected to under-perform the IE00B0H4TS55. In addition to that, Aberdeen Global is 4.79 times more volatile than IE00B0H4TS55. It trades about -0.11 of its total potential returns per unit of risk. IE00B0H4TS55 is currently generating about 0.12 per unit of volatility. If you would invest  18,547  in IE00B0H4TS55 on December 28, 2024 and sell it today you would earn a total of  265.00  from holding IE00B0H4TS55 or generate 1.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Aberdeen Global Asia  vs.  IE00B0H4TS55

Aberdeen Global Asia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aberdeen Global Asia has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

IE00B0H4TS55

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IE00B0H4TS55 are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, IE00B0H4TS55 is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Aberdeen Global and IE00B0H4TS55

The main advantage of trading using opposite Aberdeen Global and IE00B0H4TS55 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Global position performs unexpectedly, IE00B0H4TS55 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 IE00B0H4TS55 will offset losses from the drop in IE00B0H4TS55's long position.

The idea behind Aberdeen Global Asia and IE00B0H4TS55 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.