Correlation Between Abrdn Physical and IPath Series

Can any of the company-specific risk be diversified away by investing in both Abrdn Physical and IPath Series 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 IPath Series 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 iPath Series B, you can compare the effects of market volatilities on Abrdn Physical and IPath Series 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 IPath Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Physical and IPath Series.

Diversification Opportunities for Abrdn Physical and IPath Series

-0.31

Correlation Coefficient

Abrdn Physical  IPath Series

Very good diversification

The 3 months correlation between Abrdn and IPath is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Physical Precious and iPath Series B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iPath Series B 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 IPath Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iPath Series B has no effect on the direction of Abrdn Physical i.e., Abrdn Physical and IPath Series go up and down completely randomly.

Pair Corralation between Abrdn Physical and IPath Series

Given the investment horizon of 90 days abrdn Physical Precious is expected to under-perform the IPath Series. But the etf apears to be less risky and, when comparing its historical volatility, abrdn Physical Precious is 1.27 times less risky than IPath Series. The etf trades about -0.13 of its potential returns per unit of risk. The iPath Series B is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  2,550  in iPath Series B on September 2, 2024 and sell it today you would earn a total of  181.00  from holding iPath Series B or generate 7.1% return on investment over 90 days.

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

abrdn Physical Precious  vs.  iPath Series B

abrdn Physical Precious

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn Physical Precious are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Abrdn Physical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

iPath Series B

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in iPath Series B are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IPath Series is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Abrdn Physical and IPath Series

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

The idea behind abrdn Physical Precious and iPath Series B 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.