Correlation Between Abrdn Physical and RENW

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

Diversification Opportunities for Abrdn Physical and RENW

0.0

Correlation Coefficient

Abrdn Physical  RENW

Pay attention - limited upside

The 3 months correlation between Abrdn and RENW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Physical Precious and RENW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RENW 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 RENW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RENW has no effect on the direction of Abrdn Physical i.e., Abrdn Physical and RENW go up and down completely randomly.

Pair Corralation between Abrdn Physical and RENW

If you would invest  10,931  in abrdn Physical Precious on December 19, 2024 and sell it today you would earn a total of  1,748  from holding abrdn Physical Precious or generate 15.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

abrdn Physical Precious  vs.  RENW

abrdn Physical Precious

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn Physical Precious are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Abrdn Physical reported solid returns over the last few months and may actually be approaching a breakup point.

RENW

Risk-Adjusted Performance

Very Weak

Over the last 90 days RENW has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, RENW is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Abrdn Physical and RENW

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

The idea behind abrdn Physical Precious and RENW 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.