Correlation Between Aberdeen Income and India Closed

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

Diversification Opportunities for Aberdeen Income and India Closed

-0.19

Correlation Coefficient

Aberdeen Income  India Closed

Good diversification

The 3 months correlation between Aberdeen and India is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Income Credit and India Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on India Closed 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 India Closed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of India Closed has no effect on the direction of Aberdeen Income i.e., Aberdeen Income and India Closed go up and down completely randomly.

Pair Corralation between Aberdeen Income and India Closed

Considering the 90-day investment horizon Aberdeen Income Credit is expected to under-perform the India Closed. In addition to that, Aberdeen Income is 1.1 times more volatile than India Closed. It trades about -0.29 of its total potential returns per unit of risk. India Closed is currently generating about -0.02 per unit of volatility. If you would invest  1,715  in India Closed on September 17, 2024 and sell it today you would lose (9.00) from holding India Closed or give up 0.52% of portfolio value over 90 days.

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

Aberdeen Income Credit  vs.  India Closed

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.

India Closed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days India Closed has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy technical and fundamental indicators, India Closed is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Aberdeen Income and India Closed

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

The idea behind Aberdeen Income Credit and India Closed 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.