Correlation Between Bruce Fund and Aberdeen Japan

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

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

Diversification Opportunities for Bruce Fund and Aberdeen Japan

0.56

Correlation Coefficient

Bruce Fund  Aberdeen Japan

Very weak diversification

The 3 months correlation between Bruce and Aberdeen is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bruce Fund Bruce and Aberdeen Japan Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Japan Equity and Bruce Fund 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 Bruce Fund Bruce are associated (or correlated) with Aberdeen Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Japan Equity has no effect on the direction of Bruce Fund i.e., Bruce Fund and Aberdeen Japan go up and down completely randomly.

Pair Corralation between Bruce Fund and Aberdeen Japan

Assuming the 90 days horizon Bruce Fund Bruce is expected to under-perform the Aberdeen Japan. But the mutual fund apears to be less risky and, when comparing its historical volatility, Bruce Fund Bruce is 1.1 times less risky than Aberdeen Japan. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Aberdeen Japan Equity is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  581.00  in Aberdeen Japan Equity on December 1, 2024 and sell it today you would lose (6.00) from holding Aberdeen Japan Equity or give up 1.03% of portfolio value over 90 days.

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

Bruce Fund Bruce  vs.  Aberdeen Japan Equity

Bruce Fund Bruce

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bruce Fund Bruce has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Bruce Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aberdeen Japan Equity

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Bruce Fund and Aberdeen Japan

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

The idea behind Bruce Fund Bruce and Aberdeen Japan Equity 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.