Correlation Between Aberdeen Australia and IHIT

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

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

Diversification Opportunities for Aberdeen Australia and IHIT

0.0

Correlation Coefficient

Aberdeen Australia  IHIT

Pay attention - limited upside

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

Pair Corralation between Aberdeen Australia and IHIT

If you would invest (100.00) in IHIT on November 29, 2024 and sell it today you would earn a total of  100.00  from holding IHIT or generate -100.0% return on investment over 90 days.

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

Aberdeen Australia Ef  vs.  IHIT

Aberdeen Australia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aberdeen Australia Ef has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the mutual fund stockholders.

IHIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days IHIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, IHIT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aberdeen Australia and IHIT

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

The idea behind Aberdeen Australia Ef and IHIT 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 Transaction History module to view history of all your transactions and understand their impact on performance.