Correlation Between Aberdeen Global and Aberdeen

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

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

Diversification Opportunities for Aberdeen Global and Aberdeen

0.37

Correlation Coefficient

Aberdeen Global  Aberdeen

Weak diversification

The 3 months correlation between Aberdeen and Aberdeen is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Fixed and Aberdeen Equity A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Equity A and Aberdeen Global 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 Global Fixed are associated (or correlated) with Aberdeen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Equity A has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and Aberdeen go up and down completely randomly.

Pair Corralation between Aberdeen Global and Aberdeen

Assuming the 90 days horizon Aberdeen Global Fixed is expected to generate 0.28 times more return on investment than Aberdeen. However, Aberdeen Global Fixed is 3.52 times less risky than Aberdeen. It trades about 0.02 of its potential returns per unit of risk. Aberdeen Equity A is currently generating about -0.1 per unit of risk. If you would invest  862.00  in Aberdeen Global Fixed on December 1, 2024 and sell it today you would earn a total of  2.00  from holding Aberdeen Global Fixed or generate 0.23% return on investment over 90 days.

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

Aberdeen Global Fixed  vs.  Aberdeen Equity A

Aberdeen Global Fixed

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Global Fixed are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Aberdeen Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aberdeen Equity A

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Aberdeen Global and Aberdeen

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

The idea behind Aberdeen Global Fixed and Aberdeen Equity A 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 Global Correlations module to find global opportunities by holding instruments from different markets.