Correlation Between Aberdeen and Aberdeen

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

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

Diversification Opportunities for Aberdeen and Aberdeen

1.0

Correlation Coefficient

Aberdeen  Aberdeen

No risk reduction

The 3 months correlation between Aberdeen and Aberdeen is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Equity Instl and Aberdeen Multi Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Multi Cap and Aberdeen 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 Equity Instl are associated (or correlated) with Aberdeen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Multi Cap has no effect on the direction of Aberdeen i.e., Aberdeen and Aberdeen go up and down completely randomly.

Pair Corralation between Aberdeen and Aberdeen

Assuming the 90 days horizon Aberdeen Equity Instl is expected to generate about the same return on investment as Aberdeen Multi Cap Equity. However, Aberdeen is 1.0 times more volatile than Aberdeen Multi Cap Equity. It trades about -0.13 of its potential returns per unit of risk. Aberdeen Multi Cap Equity is currently producing about -0.13 per unit of risk. If you would invest  1,379  in Aberdeen Multi Cap Equity on December 30, 2024 and sell it today you would lose (105.00) from holding Aberdeen Multi Cap Equity or give up 7.61% of portfolio value over 90 days.

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

Aberdeen Equity Instl  vs.  Aberdeen Multi Cap Equity

Aberdeen Equity Instl

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aberdeen Equity Instl has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Aberdeen Multi Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aberdeen Multi Cap Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Aberdeen and Aberdeen

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

The idea behind Aberdeen Equity Instl and Aberdeen Multi Cap Equity 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.