Correlation Between DSJA and Abrdn Physical

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

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

Diversification Opportunities for DSJA and Abrdn Physical

0.0

Correlation Coefficient

DSJA  Abrdn Physical

Pay attention - limited upside

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

Pair Corralation between DSJA and Abrdn Physical

If you would invest  2,496  in abrdn Physical Gold on December 27, 2024 and sell it today you would earn a total of  384.00  from holding abrdn Physical Gold or generate 15.38% return on investment over 90 days.

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

DSJA  vs.  abrdn Physical Gold

DSJA

Risk-Adjusted Performance

Very Weak

Over the last 90 days DSJA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking indicators, DSJA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

abrdn Physical Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn Physical Gold are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Abrdn Physical disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DSJA and Abrdn Physical

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

The idea behind DSJA and abrdn Physical Gold 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.