Correlation Between Aberdeen Japan and IHIT

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

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

Diversification Opportunities for Aberdeen Japan and IHIT

0.0

Correlation Coefficient

Aberdeen Japan  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 Japan Equity and IHIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHIT and Aberdeen Japan 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 Japan Equity 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 Japan i.e., Aberdeen Japan and IHIT go up and down completely randomly.

Pair Corralation between Aberdeen Japan and IHIT

If you would invest  562.00  in Aberdeen Japan Equity on December 28, 2024 and sell it today you would earn a total of  108.00  from holding Aberdeen Japan Equity or generate 19.22% return on investment over 90 days.

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

Aberdeen Japan Equity  vs.  IHIT

Aberdeen Japan Equity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Japan Equity are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively weak technical and fundamental indicators, Aberdeen Japan reported solid returns over the last few months and may actually be approaching a breakup point.

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aberdeen Japan and IHIT

The main advantage of trading using opposite Aberdeen Japan and IHIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Japan 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 Japan Equity 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.