Correlation Between Capital Metals and Abrdn Property

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

By analyzing existing cross correlation between Capital Metals PLC and abrdn Property Income, you can compare the effects of market volatilities on Capital Metals and Abrdn Property 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 Capital Metals with a short position of Abrdn Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Metals and Abrdn Property.

Diversification Opportunities for Capital Metals and Abrdn Property

-0.34

Correlation Coefficient

Capital Metals  Abrdn Property

Very good diversification

The 3 months correlation between Capital and Abrdn is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Capital Metals PLC and abrdn Property Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn Property Income and Capital Metals 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 Capital Metals PLC are associated (or correlated) with Abrdn Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn Property Income has no effect on the direction of Capital Metals i.e., Capital Metals and Abrdn Property go up and down completely randomly.

Pair Corralation between Capital Metals and Abrdn Property

Assuming the 90 days trading horizon Capital Metals PLC is expected to under-perform the Abrdn Property. But the stock apears to be less risky and, when comparing its historical volatility, Capital Metals PLC is 1.51 times less risky than Abrdn Property. The stock trades about -0.33 of its potential returns per unit of risk. The abrdn Property Income is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  596.00  in abrdn Property Income on October 11, 2024 and sell it today you would earn a total of  54.00  from holding abrdn Property Income or generate 9.06% return on investment over 90 days.

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

Capital Metals PLC  vs.  abrdn Property Income

Capital Metals PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital Metals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Capital Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

abrdn Property Income

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn Property Income are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Abrdn Property exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capital Metals and Abrdn Property

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

The idea behind Capital Metals PLC and abrdn Property Income 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.