Correlation Between Aberdeen New and Leverage Shares

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

By analyzing existing cross correlation between Aberdeen New India and Leverage Shares 3x, you can compare the effects of market volatilities on Aberdeen New and Leverage Shares 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 New with a short position of Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen New and Leverage Shares.

Diversification Opportunities for Aberdeen New and Leverage Shares

0.62

Correlation Coefficient

Aberdeen New  Leverage Shares

Poor diversification

The 3 months correlation between Aberdeen and Leverage is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen New India and Leverage Shares 3x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 3x and Aberdeen New 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 New India are associated (or correlated) with Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 3x has no effect on the direction of Aberdeen New i.e., Aberdeen New and Leverage Shares go up and down completely randomly.

Pair Corralation between Aberdeen New and Leverage Shares

Assuming the 90 days trading horizon Aberdeen New India is expected to generate 0.06 times more return on investment than Leverage Shares. However, Aberdeen New India is 16.14 times less risky than Leverage Shares. It trades about 0.0 of its potential returns per unit of risk. Leverage Shares 3x is currently generating about -0.21 per unit of risk. If you would invest  79,600  in Aberdeen New India on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Aberdeen New India or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Aberdeen New India  vs.  Leverage Shares 3x

Aberdeen New India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aberdeen New India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Aberdeen New is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Leverage Shares 3x

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leverage Shares 3x has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with Aberdeen New and Leverage Shares

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

The idea behind Aberdeen New India and Leverage Shares 3x 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..