Correlation Between Abrdn Property and Lords Grp

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

By analyzing existing cross correlation between abrdn Property Income and Lords Grp Trading, you can compare the effects of market volatilities on Abrdn Property and Lords Grp 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 Abrdn Property with a short position of Lords Grp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Property and Lords Grp.

Diversification Opportunities for Abrdn Property and Lords Grp

-0.66

Correlation Coefficient

Abrdn Property  Lords Grp

Excellent diversification

The 3 months correlation between Abrdn and Lords is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Property Income and Lords Grp Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lords Grp Trading and Abrdn Property 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 abrdn Property Income are associated (or correlated) with Lords Grp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lords Grp Trading has no effect on the direction of Abrdn Property i.e., Abrdn Property and Lords Grp go up and down completely randomly.

Pair Corralation between Abrdn Property and Lords Grp

Assuming the 90 days trading horizon abrdn Property Income is expected to generate 1.3 times more return on investment than Lords Grp. However, Abrdn Property is 1.3 times more volatile than Lords Grp Trading. It trades about 0.15 of its potential returns per unit of risk. Lords Grp Trading is currently generating about -0.02 per unit of risk. If you would invest  596.00  in abrdn Property Income on October 13, 2024 and sell it today you would earn a total of  44.00  from holding abrdn Property Income or generate 7.38% return on investment over 90 days.

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

abrdn Property Income  vs.  Lords Grp Trading

abrdn Property Income

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn Property Income are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Abrdn Property exhibited solid returns over the last few months and may actually be approaching a breakup point.

Lords Grp Trading

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lords Grp Trading has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Lords Grp 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 Abrdn Property and Lords Grp

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

The idea behind abrdn Property Income and Lords Grp Trading 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.