Correlation Between Amana Developing and Aberdeen Emerging
Can any of the company-specific risk be diversified away by investing in both Amana Developing and Aberdeen Emerging 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 Amana Developing and Aberdeen Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amana Developing World and Aberdeen Emerging Markets, you can compare the effects of market volatilities on Amana Developing and Aberdeen Emerging 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 Amana Developing with a short position of Aberdeen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amana Developing and Aberdeen Emerging.
Diversification Opportunities for Amana Developing and Aberdeen Emerging
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amana and Aberdeen is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Amana Developing World and Aberdeen Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Emerging Markets and Amana Developing 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 Amana Developing World are associated (or correlated) with Aberdeen Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Emerging Markets has no effect on the direction of Amana Developing i.e., Amana Developing and Aberdeen Emerging go up and down completely randomly.
Pair Corralation between Amana Developing and Aberdeen Emerging
Assuming the 90 days horizon Amana Developing World is expected to under-perform the Aberdeen Emerging. In addition to that, Amana Developing is 1.01 times more volatile than Aberdeen Emerging Markets. It trades about -0.29 of its total potential returns per unit of risk. Aberdeen Emerging Markets is currently generating about -0.12 per unit of volatility. If you would invest 1,313 in Aberdeen Emerging Markets on January 26, 2024 and sell it today you would lose (25.00) from holding Aberdeen Emerging Markets or give up 1.9% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Amana Developing World vs. Aberdeen Emerging Markets
Performance |
Timeline |
Amana Developing World |
Aberdeen Emerging Markets |
Amana Developing and Aberdeen Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amana Developing and Aberdeen Emerging
The main advantage of trading using opposite Amana Developing and Aberdeen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amana Developing position performs unexpectedly, Aberdeen Emerging 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 Emerging will offset losses from the drop in Aberdeen Emerging's long position.Amana Developing vs. Amana Income Fund | Amana Developing vs. Amana Growth Fund | Amana Developing vs. Amana Participation Fund | Amana Developing vs. HUMANA INC |
Aberdeen Emerging vs. Amana Income Fund | Aberdeen Emerging vs. Amana Growth Fund | Aberdeen Emerging vs. Amana Participation Fund | Aberdeen Emerging vs. HUMANA INC |
Check out your portfolio center.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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