Correlation Between Ethereum and Aberdeen Global

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

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

Diversification Opportunities for Ethereum and Aberdeen Global

-0.03

Correlation Coefficient

Ethereum  Aberdeen Global

Good diversification

The 3 months correlation between Ethereum and Aberdeen is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Aberdeen Global Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global Asia and Ethereum 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 Ethereum are associated (or correlated) with Aberdeen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Global Asia has no effect on the direction of Ethereum i.e., Ethereum and Aberdeen Global go up and down completely randomly.

Pair Corralation between Ethereum and Aberdeen Global

Assuming the 90 days trading horizon Ethereum is expected to generate 7.42 times more return on investment than Aberdeen Global. However, Ethereum is 7.42 times more volatile than Aberdeen Global Asia. It trades about 0.06 of its potential returns per unit of risk. Aberdeen Global Asia is currently generating about 0.05 per unit of risk. If you would invest  166,397  in Ethereum on October 24, 2024 and sell it today you would earn a total of  166,511  from holding Ethereum or generate 100.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	79.12%
Values	Daily Returns

Ethereum  vs.  Aberdeen Global Asia

Ethereum

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ethereum are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Ethereum exhibited solid returns over the last few months and may actually be approaching a breakup point.

Aberdeen Global Asia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aberdeen Global Asia has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical and fundamental indicators, Aberdeen Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ethereum and Aberdeen Global

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

The idea behind Ethereum and Aberdeen Global Asia 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.