Correlation Between Aberdeen Income and RiverNorthDoubleLine

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

Diversification Opportunities for Aberdeen Income and RiverNorthDoubleLine

0.53

Correlation Coefficient

Aberdeen Income  RiverNorthDoubleLine

Very weak diversification

The 3 months correlation between Aberdeen and RiverNorthDoubleLine is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Income Credit and RiverNorthDoubleLine Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverNorthDoubleLine 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 RiverNorthDoubleLine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverNorthDoubleLine has no effect on the direction of Aberdeen Income i.e., Aberdeen Income and RiverNorthDoubleLine go up and down completely randomly.

Pair Corralation between Aberdeen Income and RiverNorthDoubleLine

Considering the 90-day investment horizon Aberdeen Income is expected to generate 1.42 times less return on investment than RiverNorthDoubleLine. In addition to that, Aberdeen Income is 1.17 times more volatile than RiverNorthDoubleLine Strategic Opportunity. It trades about 0.06 of its total potential returns per unit of risk. RiverNorthDoubleLine Strategic Opportunity is currently generating about 0.09 per unit of volatility. If you would invest  624.00  in RiverNorthDoubleLine Strategic Opportunity on December 2, 2024 and sell it today you would earn a total of  248.00  from holding RiverNorthDoubleLine Strategic Opportunity or generate 39.74% return on investment over 90 days.

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

Aberdeen Income Credit  vs.  RiverNorthDoubleLine Strategic

Aberdeen Income Credit

Risk-Adjusted Performance

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.

RiverNorthDoubleLine

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RiverNorthDoubleLine Strategic Opportunity are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, RiverNorthDoubleLine is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Aberdeen Income and RiverNorthDoubleLine

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

The idea behind Aberdeen Income Credit and RiverNorthDoubleLine Strategic Opportunity 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.