Correlation Between BSIG Old and Standard Life

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

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

Diversification Opportunities for BSIG Old and Standard Life

0.0

Correlation Coefficient

BSIG Old  Standard Life

Pay attention - limited upside

The 3 months correlation between BSIG and Standard is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BSIG Old and Standard Life Aberdeen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Life Aberdeen and BSIG Old 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 BSIG Old are associated (or correlated) with Standard Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Life Aberdeen has no effect on the direction of BSIG Old i.e., BSIG Old and Standard Life go up and down completely randomly.

Pair Corralation between BSIG Old and Standard Life

If you would invest  706.00  in Standard Life Aberdeen on December 23, 2024 and sell it today you would earn a total of  199.00  from holding Standard Life Aberdeen or generate 28.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BSIG Old  vs.  Standard Life Aberdeen

BSIG Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days BSIG Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, BSIG Old is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Standard Life Aberdeen

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Standard Life Aberdeen are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Standard Life showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BSIG Old and Standard Life

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

The idea behind BSIG Old and Standard Life Aberdeen 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.