Correlation Between CT Private and Aberdeen New

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

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

Diversification Opportunities for CT Private and Aberdeen New

0.3

Correlation Coefficient

CT Private  Aberdeen New

Weak diversification

The 3 months correlation between CTPE and Aberdeen is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding CT Private Equity and Aberdeen New India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen New India and CT Private 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 CT Private Equity are associated (or correlated) with Aberdeen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen New India has no effect on the direction of CT Private i.e., CT Private and Aberdeen New go up and down completely randomly.

Pair Corralation between CT Private and Aberdeen New

Assuming the 90 days trading horizon CT Private Equity is expected to generate 1.16 times more return on investment than Aberdeen New. However, CT Private is 1.16 times more volatile than Aberdeen New India. It trades about -0.03 of its potential returns per unit of risk. Aberdeen New India is currently generating about -0.09 per unit of risk. If you would invest  48,099  in CT Private Equity on December 31, 2024 and sell it today you would lose (1,899) from holding CT Private Equity or give up 3.95% of portfolio value over 90 days.

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

CT Private Equity  vs.  Aberdeen New India

CT Private Equity

Risk-Adjusted Performance

Very Weak

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

Aberdeen New India

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aberdeen New India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with CT Private and Aberdeen New

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

The idea behind CT Private Equity and Aberdeen New India 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.

Check out your portfolio center.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.