Correlation Between Aberdeen Global and CBH

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

By analyzing existing cross correlation between Aberdeen Global Dynamic and CBH, you can compare the effects of market volatilities on Aberdeen Global and CBH 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 Global with a short position of CBH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Global and CBH.

Diversification Opportunities for Aberdeen Global and CBH

0.0

Correlation Coefficient

Aberdeen Global  CBH

Pay attention - limited upside

The 3 months correlation between Aberdeen and CBH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Dynamic and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH and Aberdeen Global 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 Global Dynamic are associated (or correlated) with CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and CBH go up and down completely randomly.

Pair Corralation between Aberdeen Global and CBH

If you would invest  961.00  in Aberdeen Global Dynamic on December 27, 2024 and sell it today you would earn a total of  52.00  from holding Aberdeen Global Dynamic or generate 5.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Aberdeen Global Dynamic  vs.  CBH

Aberdeen Global Dynamic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Global Dynamic are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Aberdeen Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

CBH

Risk-Adjusted Performance

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Aberdeen Global and CBH

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

The idea behind Aberdeen Global Dynamic and CBH 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.