Correlation Between Aberdeen New and CT Private

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

Diversification Opportunities for Aberdeen New and CT Private

0.21

Correlation Coefficient

Aberdeen New  CT Private

Modest diversification

The 3 months correlation between Aberdeen and CTPE is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen New India and CT Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CT Private Equity 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 CT Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CT Private Equity has no effect on the direction of Aberdeen New i.e., Aberdeen New and CT Private go up and down completely randomly.

Pair Corralation between Aberdeen New and CT Private

Assuming the 90 days trading horizon Aberdeen New India is expected to under-perform the CT Private. But the etf apears to be less risky and, when comparing its historical volatility, Aberdeen New India is 1.15 times less risky than CT Private. The etf trades about -0.09 of its potential returns per unit of risk. The CT Private Equity is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  47,853  in CT Private Equity on December 25, 2024 and sell it today you would lose (1,203) from holding CT Private Equity or give up 2.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Aberdeen New India  vs.  CT Private Equity

Aberdeen New India

Risk-Adjusted Performance

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 latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

CT Private Equity

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Aberdeen New and CT Private

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

The idea behind Aberdeen New India and CT Private Equity 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.