Correlation Between Aberdeen Asia and Clough Global

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

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

Diversification Opportunities for Aberdeen Asia and Clough Global

0.63

Correlation Coefficient

Aberdeen Asia  Clough Global

Poor diversification

The 3 months correlation between Aberdeen and Clough is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Asia Pacific If and Clough Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clough Global Opport and Aberdeen Asia 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 Asia Pacific If are associated (or correlated) with Clough Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clough Global Opport has no effect on the direction of Aberdeen Asia i.e., Aberdeen Asia and Clough Global go up and down completely randomly.

Pair Corralation between Aberdeen Asia and Clough Global

Considering the 90-day investment horizon Aberdeen Asia is expected to generate 1.47 times less return on investment than Clough Global. But when comparing it to its historical volatility, Aberdeen Asia Pacific If is 1.03 times less risky than Clough Global. It trades about 0.05 of its potential returns per unit of risk. Clough Global Opportunities is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  374.00  in Clough Global Opportunities on November 29, 2024 and sell it today you would earn a total of  136.00  from holding Clough Global Opportunities or generate 36.36% return on investment over 90 days.

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

Aberdeen Asia Pacific If  vs.  Clough Global Opportunities

Aberdeen Asia Pacific

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Asia Pacific If are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aberdeen Asia is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Clough Global Opport

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clough Global Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy essential indicators, Clough Global is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Aberdeen Asia and Clough Global

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

The idea behind Aberdeen Asia Pacific If and Clough Global Opportunities 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.