Correlation Between Ameritrans Capital and Abrdn Emerging

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

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

Diversification Opportunities for Ameritrans Capital and Abrdn Emerging

0.15

Correlation Coefficient

Ameritrans Capital  Abrdn Emerging

Average diversification

The 3 months correlation between Ameritrans and Abrdn is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ameritrans Capital Corp and Abrdn Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abrdn Emerging Markets and Ameritrans Capital 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 Ameritrans Capital Corp are associated (or correlated) with Abrdn Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abrdn Emerging Markets has no effect on the direction of Ameritrans Capital i.e., Ameritrans Capital and Abrdn Emerging go up and down completely randomly.

Pair Corralation between Ameritrans Capital and Abrdn Emerging

Assuming the 90 days horizon Ameritrans Capital Corp is expected to under-perform the Abrdn Emerging. In addition to that, Ameritrans Capital is 11.14 times more volatile than Abrdn Emerging Markets. It trades about -0.15 of its total potential returns per unit of risk. Abrdn Emerging Markets is currently generating about 0.0 per unit of volatility. If you would invest  528.00  in Abrdn Emerging Markets on October 7, 2024 and sell it today you would lose (3.00) from holding Abrdn Emerging Markets or give up 0.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.35%
Values	Daily Returns

Ameritrans Capital Corp  vs.  Abrdn Emerging Markets

Ameritrans Capital Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ameritrans Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Preferred Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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.

Pair Trading with Ameritrans Capital and Abrdn Emerging

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

The idea behind Ameritrans Capital Corp and Abrdn Emerging Markets 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.

Check out your portfolio center.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.