Correlation Between Aberdeen Global and BlackRock Global

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

By analyzing existing cross correlation between Aberdeen Global Asian and BlackRock Global Funds, you can compare the effects of market volatilities on Aberdeen Global and BlackRock Global 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 BlackRock Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Global and BlackRock Global.

Diversification Opportunities for Aberdeen Global and BlackRock Global

-0.32

Correlation Coefficient

Aberdeen Global  BlackRock Global

Very good diversification

The 3 months correlation between Aberdeen and BlackRock is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Asian and BlackRock Global Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Global Funds 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 Asian are associated (or correlated) with BlackRock Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Global Funds has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and BlackRock Global go up and down completely randomly.

Pair Corralation between Aberdeen Global and BlackRock Global

Assuming the 90 days trading horizon Aberdeen Global Asian is expected to under-perform the BlackRock Global. But the fund apears to be less risky and, when comparing its historical volatility, Aberdeen Global Asian is 1.14 times less risky than BlackRock Global. The fund trades about -0.15 of its potential returns per unit of risk. The BlackRock Global Funds is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  4,983  in BlackRock Global Funds on December 26, 2024 and sell it today you would earn a total of  260.00  from holding BlackRock Global Funds or generate 5.22% return on investment over 90 days.

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

Aberdeen Global Asian  vs.  BlackRock Global Funds

Aberdeen Global Asian

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aberdeen Global Asian 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.

BlackRock Global Funds

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Global Funds are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively steady basic indicators, BlackRock Global is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Aberdeen Global and BlackRock Global

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

The idea behind Aberdeen Global Asian and BlackRock Global Funds 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.