Correlation Between RiverNorth Flexible and Aberdeen Global

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

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

Diversification Opportunities for RiverNorth Flexible and Aberdeen Global

0.22

Correlation Coefficient

RiverNorth Flexible  Aberdeen Global

Modest diversification

The 3 months correlation between RiverNorth and Aberdeen is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding RiverNorth Flexible Municipalo and Aberdeen Global IF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global IF and RiverNorth Flexible 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 RiverNorth Flexible Municipalome are associated (or correlated) with Aberdeen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Global IF has no effect on the direction of RiverNorth Flexible i.e., RiverNorth Flexible and Aberdeen Global go up and down completely randomly.

Pair Corralation between RiverNorth Flexible and Aberdeen Global

Considering the 90-day investment horizon RiverNorth Flexible Municipalome is expected to under-perform the Aberdeen Global. But the etf apears to be less risky and, when comparing its historical volatility, RiverNorth Flexible Municipalome is 1.92 times less risky than Aberdeen Global. The etf trades about -0.09 of its potential returns per unit of risk. The Aberdeen Global IF is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  573.00  in Aberdeen Global IF on December 10, 2024 and sell it today you would earn a total of  26.00  from holding Aberdeen Global IF or generate 4.54% return on investment over 90 days.

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

RiverNorth Flexible Municipalo  vs.  Aberdeen Global IF

RiverNorth Flexible

Risk-Adjusted Performance

Very Weak

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

Aberdeen Global IF

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Global IF are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Aberdeen Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with RiverNorth Flexible and Aberdeen Global

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

The idea behind RiverNorth Flexible Municipalome and Aberdeen Global IF 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.