Correlation Between Abrdn Emerging and Listed Funds

Can any of the company-specific risk be diversified away by investing in both Abrdn Emerging and Listed Funds 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 Abrdn Emerging and Listed Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Abrdn Emerging Markets and Listed Funds Trust, you can compare the effects of market volatilities on Abrdn Emerging and Listed Funds 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 Abrdn Emerging with a short position of Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Emerging and Listed Funds.

Diversification Opportunities for Abrdn Emerging and Listed Funds

-0.69

Correlation Coefficient

Abrdn Emerging  Listed Funds

Excellent diversification

The 3 months correlation between Abrdn and Listed is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Abrdn Emerging Markets and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust and Abrdn Emerging 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 Abrdn Emerging Markets are associated (or correlated) with Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of Abrdn Emerging i.e., Abrdn Emerging and Listed Funds go up and down completely randomly.

Pair Corralation between Abrdn Emerging and Listed Funds

Considering the 90-day investment horizon Abrdn Emerging Markets is expected to generate 14.86 times more return on investment than Listed Funds. However, Abrdn Emerging is 14.86 times more volatile than Listed Funds Trust. It trades about 0.03 of its potential returns per unit of risk. Listed Funds Trust is currently generating about 0.2 per unit of risk. If you would invest  515.00  in Abrdn Emerging Markets on October 4, 2024 and sell it today you would earn a total of  4.00  from holding Abrdn Emerging Markets or generate 0.78% return on investment over 90 days.

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

Abrdn Emerging Markets  vs.  Listed Funds Trust

Abrdn Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Abrdn Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. Despite latest fragile performance, the Fund's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the mutual fund stockholders.

Listed Funds Trust

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Listed Funds Trust are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Listed Funds is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Abrdn Emerging and Listed Funds

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

The idea behind Abrdn Emerging Markets and Listed Funds Trust 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.