Correlation Between Barclays Capital and Abrdn Bloomberg

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

By analyzing existing cross correlation between Barclays Capital and abrdn Bloomberg All, you can compare the effects of market volatilities on Barclays Capital and Abrdn Bloomberg 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 Barclays Capital with a short position of Abrdn Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and Abrdn Bloomberg.

Diversification Opportunities for Barclays Capital and Abrdn Bloomberg

-0.46

Correlation Coefficient

Barclays Capital  Abrdn Bloomberg

Very good diversification

The 3 months correlation between Barclays and Abrdn is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and abrdn Bloomberg All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn Bloomberg All and Barclays Capital 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 Barclays Capital are associated (or correlated) with Abrdn Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn Bloomberg All has no effect on the direction of Barclays Capital i.e., Barclays Capital and Abrdn Bloomberg go up and down completely randomly.

Pair Corralation between Barclays Capital and Abrdn Bloomberg

Allowing for the 90-day total investment horizon Barclays Capital is expected to generate 2.34 times more return on investment than Abrdn Bloomberg. However, Barclays Capital is 2.34 times more volatile than abrdn Bloomberg All. It trades about 0.06 of its potential returns per unit of risk. abrdn Bloomberg All is currently generating about 0.0 per unit of risk. If you would invest  4,763  in Barclays Capital on September 16, 2024 and sell it today you would earn a total of  637.00  from holding Barclays Capital or generate 13.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	28.83%
Values	Daily Returns

Barclays Capital  vs.  abrdn Bloomberg All

Barclays Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Barclays Capital is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

abrdn Bloomberg All

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn Bloomberg All are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Abrdn Bloomberg is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Barclays Capital and Abrdn Bloomberg

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

The idea behind Barclays Capital and abrdn Bloomberg All 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.