Correlation Between Aberdeen Income and Fidelity International

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Can any of the company-specific risk be diversified away by investing in both Aberdeen Income and Fidelity International 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 Fidelity International 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 Fidelity International Enhanced, you can compare the effects of market volatilities on Aberdeen Income and Fidelity International 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 Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Income and Fidelity International.

Diversification Opportunities for Aberdeen Income and Fidelity International

AberdeenFidelityDiversified AwayAberdeenFidelityDiversified Away100%
-0.46
  Correlation Coefficient

Very good diversification

The 3 months correlation between Aberdeen and Fidelity is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Income Credit and Fidelity International Enhance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International 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 Fidelity International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity International has no effect on the direction of Aberdeen Income i.e., Aberdeen Income and Fidelity International go up and down completely randomly.

Pair Corralation between Aberdeen Income and Fidelity International

If you would invest  1,067  in Fidelity International Enhanced on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Fidelity International Enhanced or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy1.59%
ValuesDaily Returns

Aberdeen Income Credit  vs.  Fidelity International Enhance

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -3-2-10123
JavaScript chart by amCharts 3.21.15ACP FIENX
       Timeline  
Aberdeen Income Credit 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aberdeen Income Credit has generated negative risk-adjusted returns adding no value to fund investors. Even with latest abnormal performance, the Fund's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the fund retail investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec5.966.16.26.36.46.5
Fidelity International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fidelity International Enhanced has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fidelity International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aberdeen Income and Fidelity International Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.45-1.09-0.73-0.37-0.04850.170.530.891.25 0.10.20.30.40.50.6
JavaScript chart by amCharts 3.21.15ACP FIENX
       Returns  

Pair Trading with Aberdeen Income and Fidelity International

The main advantage of trading using opposite Aberdeen Income and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Income position performs unexpectedly, Fidelity International 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 Fidelity International will offset losses from the drop in Fidelity International's long position.
The idea behind Aberdeen Income Credit and Fidelity International Enhanced 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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