Correlation Between TR Property and Aberdeen Diversified

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

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

Diversification Opportunities for TR Property and Aberdeen Diversified

-0.66

Correlation Coefficient

TR Property  Aberdeen Diversified

Excellent diversification

The 3 months correlation between TRY and Aberdeen is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding TR Property Investment and Aberdeen Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Diversified and TR Property 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 TR Property Investment are associated (or correlated) with Aberdeen Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Diversified has no effect on the direction of TR Property i.e., TR Property and Aberdeen Diversified go up and down completely randomly.

Pair Corralation between TR Property and Aberdeen Diversified

Assuming the 90 days trading horizon TR Property Investment is expected to under-perform the Aberdeen Diversified. But the stock apears to be less risky and, when comparing its historical volatility, TR Property Investment is 1.04 times less risky than Aberdeen Diversified. The stock trades about -0.04 of its potential returns per unit of risk. The Aberdeen Diversified Income is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  4,310  in Aberdeen Diversified Income on December 30, 2024 and sell it today you would earn a total of  580.00  from holding Aberdeen Diversified Income or generate 13.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

TR Property Investment  vs.  Aberdeen Diversified Income

TR Property Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days TR Property Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, TR Property is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Aberdeen Diversified

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Diversified Income are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aberdeen Diversified unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TR Property and Aberdeen Diversified

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

The idea behind TR Property Investment and Aberdeen Diversified Income 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.