Correlation Between Aberdeen Income and Altegris Futures

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

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

Diversification Opportunities for Aberdeen Income and Altegris Futures

-0.49

Correlation Coefficient

Aberdeen Income  Altegris Futures

Very good diversification

The 3 months correlation between Aberdeen and Altegris is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Income Credit and Altegris Futures Evolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altegris Futures Evo and Aberdeen Income 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 Income Credit are associated (or correlated) with Altegris Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altegris Futures Evo has no effect on the direction of Aberdeen Income i.e., Aberdeen Income and Altegris Futures go up and down completely randomly.

Pair Corralation between Aberdeen Income and Altegris Futures

Considering the 90-day investment horizon Aberdeen Income Credit is expected to generate 2.0 times more return on investment than Altegris Futures. However, Aberdeen Income is 2.0 times more volatile than Altegris Futures Evolution. It trades about 0.04 of its potential returns per unit of risk. Altegris Futures Evolution is currently generating about 0.02 per unit of risk. If you would invest  502.00  in Aberdeen Income Credit on September 17, 2024 and sell it today you would earn a total of  99.00  from holding Aberdeen Income Credit or generate 19.72% return on investment over 90 days.

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

Aberdeen Income Credit  vs.  Altegris Futures Evolution

Aberdeen Income Credit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aberdeen Income Credit has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable fundamental indicators, Aberdeen Income is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Altegris Futures Evo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altegris Futures Evolution has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Altegris Futures is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aberdeen Income and Altegris Futures

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

The idea behind Aberdeen Income Credit and Altegris Futures Evolution 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.