Correlation Between Blackrock Enhanced and Aberdeen Global

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

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

Diversification Opportunities for Blackrock Enhanced and Aberdeen Global

0.65

Correlation Coefficient

Blackrock Enhanced  Aberdeen Global

Poor diversification

The 3 months correlation between Blackrock and Aberdeen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Enhanced Equity 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 Blackrock Enhanced 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 Blackrock Enhanced Equity 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 Blackrock Enhanced i.e., Blackrock Enhanced and Aberdeen Global go up and down completely randomly.

Pair Corralation between Blackrock Enhanced and Aberdeen Global

Considering the 90-day investment horizon Blackrock Enhanced Equity is expected to generate 0.73 times more return on investment than Aberdeen Global. However, Blackrock Enhanced Equity is 1.38 times less risky than Aberdeen Global. It trades about 0.0 of its potential returns per unit of risk. Aberdeen Global Premier is currently generating about -0.11 per unit of risk. If you would invest  880.00  in Blackrock Enhanced Equity on November 29, 2024 and sell it today you would lose (1.00) from holding Blackrock Enhanced Equity or give up 0.11% of portfolio value over 90 days.

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

Blackrock Enhanced Equity  vs.  Aberdeen Global Premier

Blackrock Enhanced Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Enhanced Equity has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively steady fundamental indicators, Blackrock Enhanced is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

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 Blackrock Enhanced and Aberdeen Global

The main advantage of trading using opposite Blackrock Enhanced and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Enhanced 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 Blackrock Enhanced Equity 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.