Correlation Between RiverNorthDoubleLine and Aberdeen Australia

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

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

Diversification Opportunities for RiverNorthDoubleLine and Aberdeen Australia

0.2

Correlation Coefficient

RiverNorthDoubleLine  Aberdeen Australia

Modest diversification

The 3 months correlation between RiverNorthDoubleLine and Aberdeen is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding RiverNorthDoubleLine Strategic and Aberdeen Australia Ef in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Australia and RiverNorthDoubleLine 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 RiverNorthDoubleLine Strategic Opportunity are associated (or correlated) with Aberdeen Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Australia has no effect on the direction of RiverNorthDoubleLine i.e., RiverNorthDoubleLine and Aberdeen Australia go up and down completely randomly.

Pair Corralation between RiverNorthDoubleLine and Aberdeen Australia

Considering the 90-day investment horizon RiverNorthDoubleLine Strategic Opportunity is expected to generate 0.57 times more return on investment than Aberdeen Australia. However, RiverNorthDoubleLine Strategic Opportunity is 1.77 times less risky than Aberdeen Australia. It trades about 0.16 of its potential returns per unit of risk. Aberdeen Australia Ef is currently generating about -0.12 per unit of risk. If you would invest  824.00  in RiverNorthDoubleLine Strategic Opportunity on November 29, 2024 and sell it today you would earn a total of  44.00  from holding RiverNorthDoubleLine Strategic Opportunity or generate 5.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

RiverNorthDoubleLine Strategic  vs.  Aberdeen Australia Ef

RiverNorthDoubleLine

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RiverNorthDoubleLine Strategic Opportunity are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, RiverNorthDoubleLine is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

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.

Pair Trading with RiverNorthDoubleLine and Aberdeen Australia

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

The idea behind RiverNorthDoubleLine Strategic Opportunity and Aberdeen Australia Ef 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.