Correlation Between Abrdn Physical and Abrdn ETFs

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

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

Diversification Opportunities for Abrdn Physical and Abrdn ETFs

0.63

Correlation Coefficient

Abrdn Physical  Abrdn ETFs

Poor diversification

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

Pair Corralation between Abrdn Physical and Abrdn ETFs

Given the investment horizon of 90 days abrdn Physical Precious is expected to generate 1.68 times more return on investment than Abrdn ETFs. However, Abrdn Physical is 1.68 times more volatile than abrdn ETFs . It trades about -0.09 of its potential returns per unit of risk. abrdn ETFs is currently generating about -0.3 per unit of risk. If you would invest  11,418  in abrdn Physical Precious on October 9, 2024 and sell it today you would lose (220.00) from holding abrdn Physical Precious or give up 1.93% of portfolio value over 90 days.

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

abrdn Physical Precious  vs.  abrdn ETFs

abrdn Physical Precious

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days abrdn Physical Precious has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Abrdn Physical is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

abrdn ETFs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days abrdn ETFs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Abrdn ETFs is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Abrdn Physical and Abrdn ETFs

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

The idea behind abrdn Physical Precious and abrdn ETFs 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.