Correlation Between Aberdeen Total and Cbre Clarion

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

Diversification Opportunities for Aberdeen Total and Cbre Clarion

0.02

Correlation Coefficient

Aberdeen Total  Cbre Clarion

Significant diversification

The 3 months correlation between Aberdeen and CBRE is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Total Dynamic and Cbre Clarion Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cbre Clarion Global 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 Cbre Clarion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cbre Clarion Global has no effect on the direction of Aberdeen Total i.e., Aberdeen Total and Cbre Clarion go up and down completely randomly.

Pair Corralation between Aberdeen Total and Cbre Clarion

Considering the 90-day investment horizon Aberdeen Total Dynamic is expected to generate 0.5 times more return on investment than Cbre Clarion. However, Aberdeen Total Dynamic is 2.02 times less risky than Cbre Clarion. It trades about 0.07 of its potential returns per unit of risk. Cbre Clarion Global is currently generating about 0.03 per unit of risk. If you would invest  683.00  in Aberdeen Total Dynamic on September 3, 2024 and sell it today you would earn a total of  197.00  from holding Aberdeen Total Dynamic or generate 28.84% return on investment over 90 days.

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

Aberdeen Total Dynamic  vs.  Cbre Clarion Global

Aberdeen Total Dynamic

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Total Dynamic are ranked lower than 5 (%) 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.

Cbre Clarion Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cbre Clarion Global has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable technical and fundamental indicators, Cbre Clarion is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Aberdeen Total and Cbre Clarion

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

The idea behind Aberdeen Total Dynamic and Cbre Clarion Global 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.