Correlation Between Aberdeen Standard and Kayne Anderson

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

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

Diversification Opportunities for Aberdeen Standard and Kayne Anderson

-0.4

Correlation Coefficient

Aberdeen Standard  Kayne Anderson

Very good diversification

The 3 months correlation between Aberdeen and Kayne is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Standard Global and Kayne Anderson Midstreamenergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kayne Anderson Midst and Aberdeen Standard 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 Standard Global are associated (or correlated) with Kayne Anderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kayne Anderson Midst has no effect on the direction of Aberdeen Standard i.e., Aberdeen Standard and Kayne Anderson go up and down completely randomly.

Pair Corralation between Aberdeen Standard and Kayne Anderson

Given the investment horizon of 90 days Aberdeen Standard Global is expected to generate 0.6 times more return on investment than Kayne Anderson. However, Aberdeen Standard Global is 1.67 times less risky than Kayne Anderson. It trades about 0.07 of its potential returns per unit of risk. Kayne Anderson Midstreamenergy is currently generating about 0.03 per unit of risk. If you would invest  1,479  in Aberdeen Standard Global on September 2, 2024 and sell it today you would earn a total of  507.00  from holding Aberdeen Standard Global or generate 34.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	31.05%
Values	Daily Returns

Aberdeen Standard Global  vs.  Kayne Anderson Midstreamenergy

Aberdeen Standard Global

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Standard Global are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong technical and fundamental indicators, Aberdeen Standard is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Kayne Anderson Midst

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kayne Anderson Midstreamenergy has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable primary indicators, Kayne Anderson is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Aberdeen Standard and Kayne Anderson

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

The idea behind Aberdeen Standard Global and Kayne Anderson Midstreamenergy 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.