Correlation Between Aberdeen Global and Templeton Global

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

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

Diversification Opportunities for Aberdeen Global and Templeton Global

-0.03

Correlation Coefficient

Aberdeen Global  Templeton Global

Good diversification

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

Pair Corralation between Aberdeen Global and Templeton Global

Considering the 90-day investment horizon Aberdeen Global IF is expected to generate 1.95 times more return on investment than Templeton Global. However, Aberdeen Global is 1.95 times more volatile than Templeton Global Income. It trades about 0.06 of its potential returns per unit of risk. Templeton Global Income is currently generating about 0.04 per unit of risk. If you would invest  366.00  in Aberdeen Global IF on September 19, 2024 and sell it today you would earn a total of  217.00  from holding Aberdeen Global IF or generate 59.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	28.63%
Values	Daily Returns

Aberdeen Global IF  vs.  Templeton Global Income

Aberdeen Global IF

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Global IF are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Aberdeen Global is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Templeton Global Income

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Aberdeen Global and Templeton Global

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

The idea behind Aberdeen Global IF and Templeton Global 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.