Correlation Between Hansa Investment and Aberdeen Diversified

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

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

Diversification Opportunities for Hansa Investment and Aberdeen Diversified

-0.01

Correlation Coefficient

Hansa Investment  Aberdeen Diversified

Good diversification

The 3 months correlation between Hansa and Aberdeen is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Investment and Aberdeen Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Diversified and Hansa Investment 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 Hansa Investment are associated (or correlated) with Aberdeen Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Diversified has no effect on the direction of Hansa Investment i.e., Hansa Investment and Aberdeen Diversified go up and down completely randomly.

Pair Corralation between Hansa Investment and Aberdeen Diversified

Assuming the 90 days trading horizon Hansa Investment is expected to generate 2.66 times less return on investment than Aberdeen Diversified. In addition to that, Hansa Investment is 1.18 times more volatile than Aberdeen Diversified Income. It trades about 0.04 of its total potential returns per unit of risk. Aberdeen Diversified Income is currently generating about 0.12 per unit of volatility. If you would invest  4,270  in Aberdeen Diversified Income on December 2, 2024 and sell it today you would earn a total of  410.00  from holding Aberdeen Diversified Income or generate 9.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Hansa Investment  vs.  Aberdeen Diversified Income

Hansa Investment

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hansa Investment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Hansa Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Aberdeen Diversified

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Diversified Income are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aberdeen Diversified may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hansa Investment and Aberdeen Diversified

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

The idea behind Hansa Investment and Aberdeen Diversified Income 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.