Correlation Between Aberdeen Select and Aberdeen

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

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

Diversification Opportunities for Aberdeen Select and Aberdeen

-0.38

Correlation Coefficient

Aberdeen Select  Aberdeen

Very good diversification

The 3 months correlation between Aberdeen and Aberdeen is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Select International and Aberdeen Eq Long Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Eq Long and Aberdeen Select 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 Select International 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 Eq Long has no effect on the direction of Aberdeen Select i.e., Aberdeen Select and Aberdeen go up and down completely randomly.

Pair Corralation between Aberdeen Select and Aberdeen

Assuming the 90 days horizon Aberdeen Select International is expected to under-perform the Aberdeen. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aberdeen Select International is 1.62 times less risky than Aberdeen. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Aberdeen Eq Long Short is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  828.00  in Aberdeen Eq Long Short on August 31, 2024 and sell it today you would earn a total of  133.00  from holding Aberdeen Eq Long Short or generate 16.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aberdeen Select International  vs.  Aberdeen Eq Long Short

Aberdeen Select Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aberdeen Select International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Aberdeen Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aberdeen Eq Long

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Eq Long Short are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Aberdeen showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aberdeen Select and Aberdeen

The main advantage of trading using opposite Aberdeen Select and Aberdeen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Select 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 Select International and Aberdeen Eq Long Short 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.