Correlation Between Aberdeen Income and Cbre Clarion

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

Diversification Opportunities for Aberdeen Income and Cbre Clarion

-0.56

Correlation Coefficient

Aberdeen Income  Cbre Clarion

Excellent diversification

The 3 months correlation between Aberdeen and Cbre is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Income Credit and Cbre Clarion Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cbre Clarion Global 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 Cbre Clarion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cbre Clarion Global has no effect on the direction of Aberdeen Income i.e., Aberdeen Income and Cbre Clarion go up and down completely randomly.

Pair Corralation between Aberdeen Income and Cbre Clarion

Considering the 90-day investment horizon Aberdeen Income Credit is expected to generate 0.65 times more return on investment than Cbre Clarion. However, Aberdeen Income Credit is 1.54 times less risky than Cbre Clarion. It trades about -0.01 of its potential returns per unit of risk. Cbre Clarion Global is currently generating about -0.2 per unit of risk. If you would invest  622.00  in Aberdeen Income Credit on September 13, 2024 and sell it today you would lose (5.00) from holding Aberdeen Income Credit or give up 0.8% of portfolio value over 90 days.

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

Aberdeen Income Credit  vs.  Cbre Clarion Global

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 latest stock price agitation, may contribute to short-term losses for the retail investors.

Cbre Clarion Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cbre Clarion Global has generated negative risk-adjusted returns adding no value to fund investors. Even with unsteady performance in the last few months, the Fund's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the fund retail investors.

Pair Trading with Aberdeen Income and Cbre Clarion

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

The idea behind Aberdeen Income Credit and Cbre Clarion Global 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.