Correlation Between Aberdeen Total and Aberdeen Global

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

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

Diversification Opportunities for Aberdeen Total and Aberdeen Global

0.51

Correlation Coefficient

Aberdeen Total  Aberdeen Global

Very weak diversification

The 3 months correlation between Aberdeen and Aberdeen is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Total Dynamic and Aberdeen Global Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global Premier and Aberdeen Total 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 Total Dynamic are associated (or correlated) with Aberdeen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Global Premier has no effect on the direction of Aberdeen Total i.e., Aberdeen Total and Aberdeen Global go up and down completely randomly.

Pair Corralation between Aberdeen Total and Aberdeen Global

Considering the 90-day investment horizon Aberdeen Total Dynamic is expected to generate 1.26 times more return on investment than Aberdeen Global. However, Aberdeen Total is 1.26 times more volatile than Aberdeen Global Premier. It trades about 0.11 of its potential returns per unit of risk. Aberdeen Global Premier is currently generating about 0.09 per unit of risk. If you would invest  856.00  in Aberdeen Total Dynamic on November 29, 2024 and sell it today you would earn a total of  14.00  from holding Aberdeen Total Dynamic or generate 1.64% return on investment over 90 days.

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

Aberdeen Total Dynamic  vs.  Aberdeen Global Premier

Aberdeen Total Dynamic

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Total Dynamic are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Aberdeen Total is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Aberdeen Global Premier

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aberdeen Global Premier has generated negative risk-adjusted returns adding no value to fund investors. Even with latest unsteady performance, the Fund's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the fund retail investors.

Pair Trading with Aberdeen Total and Aberdeen Global

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

The idea behind Aberdeen Total Dynamic and Aberdeen Global Premier 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.