Correlation Between Aberdeen Income and NORTHWELL

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

Diversification Opportunities for Aberdeen Income and NORTHWELL

-0.61

Correlation Coefficient

Aberdeen Income  NORTHWELL

Excellent diversification

The 3 months correlation between Aberdeen and NORTHWELL is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Income Credit and NORTHWELL HEALTHCARE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHWELL HEALTHCARE INC 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 NORTHWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHWELL HEALTHCARE INC has no effect on the direction of Aberdeen Income i.e., Aberdeen Income and NORTHWELL go up and down completely randomly.

Pair Corralation between Aberdeen Income and NORTHWELL

Considering the 90-day investment horizon Aberdeen Income Credit is expected to generate 0.3 times more return on investment than NORTHWELL. However, Aberdeen Income Credit is 3.35 times less risky than NORTHWELL. It trades about 0.13 of its potential returns per unit of risk. NORTHWELL HEALTHCARE INC is currently generating about -0.07 per unit of risk. If you would invest  617.00  in Aberdeen Income Credit on September 12, 2024 and sell it today you would earn a total of  28.00  from holding Aberdeen Income Credit or generate 4.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	79.37%
Values	Daily Returns

Aberdeen Income Credit  vs.  NORTHWELL HEALTHCARE INC

Aberdeen Income Credit

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Income Credit are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. 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.

NORTHWELL HEALTHCARE INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NORTHWELL HEALTHCARE INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NORTHWELL HEALTHCARE INC investors.

Pair Trading with Aberdeen Income and NORTHWELL

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

The idea behind Aberdeen Income Credit and NORTHWELL HEALTHCARE INC 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.