Correlation Between Xp and Aberdeen Global

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

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

Diversification Opportunities for Xp and Aberdeen Global

-0.31

Correlation Coefficient

Xp  Aberdeen Global

Very good diversification

The 3 months correlation between Xp and Aberdeen is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc 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 Xp 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 Xp Inc 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 Xp i.e., Xp and Aberdeen Global go up and down completely randomly.

Pair Corralation between Xp and Aberdeen Global

Allowing for the 90-day total investment horizon Xp is expected to generate 7.46 times less return on investment than Aberdeen Global. In addition to that, Xp is 1.74 times more volatile than Aberdeen Global IF. It trades about 0.01 of its total potential returns per unit of risk. Aberdeen Global IF is currently generating about 0.07 per unit of volatility. If you would invest  369.00  in Aberdeen Global IF on September 27, 2024 and sell it today you would earn a total of  237.57  from holding Aberdeen Global IF or generate 64.38% return on investment over 90 days.

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

Xp Inc  vs.  Aberdeen Global IF

Xp Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Aberdeen Global IF

Risk-Adjusted Performance

5 of 100

Modest

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 Xp and Aberdeen Global

The main advantage of trading using opposite Xp and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp 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 Xp Inc 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.