Correlation Between Aberdeen Global and Rivernorth Opportunities

Can any of the company-specific risk be diversified away by investing in both Aberdeen Global and Rivernorth Opportunities 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 Rivernorth Opportunities 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 Rivernorth Opportunities, you can compare the effects of market volatilities on Aberdeen Global and Rivernorth Opportunities 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 Rivernorth Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Global and Rivernorth Opportunities.

Diversification Opportunities for Aberdeen Global and Rivernorth Opportunities

0.23

Correlation Coefficient

Aberdeen Global  Rivernorth Opportunities

Modest diversification

The 3 months correlation between Aberdeen and Rivernorth is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global IF and Rivernorth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rivernorth Opportunities 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 Rivernorth Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rivernorth Opportunities has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and Rivernorth Opportunities go up and down completely randomly.

Pair Corralation between Aberdeen Global and Rivernorth Opportunities

Considering the 90-day investment horizon Aberdeen Global IF is expected to generate 1.32 times more return on investment than Rivernorth Opportunities. However, Aberdeen Global is 1.32 times more volatile than Rivernorth Opportunities. It trades about 0.11 of its potential returns per unit of risk. Rivernorth Opportunities is currently generating about 0.14 per unit of risk. If you would invest  565.00  in Aberdeen Global IF on December 30, 2024 and sell it today you would earn a total of  38.00  from holding Aberdeen Global IF or generate 6.73% return on investment over 90 days.

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

Aberdeen Global IF  vs.  Rivernorth Opportunities

Aberdeen Global IF

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Global IF are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Aberdeen Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Rivernorth Opportunities

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rivernorth Opportunities are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Rivernorth Opportunities may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aberdeen Global and Rivernorth Opportunities

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

The idea behind Aberdeen Global IF and Rivernorth 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.