Correlation Between Ab Global and Aberdeen Global
Can any of the company-specific risk be diversified away by investing in both Ab Global 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 Ab Global and Aberdeen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global E and Aberdeen Global Equty, you can compare the effects of market volatilities on Ab Global 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 Ab Global with a short position of Aberdeen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Aberdeen Global.
Diversification Opportunities for Ab Global and Aberdeen Global
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GCEAX and Aberdeen is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global E and Aberdeen Global Equty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global Equty and Ab Global 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 Ab Global E 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 Equty has no effect on the direction of Ab Global i.e., Ab Global and Aberdeen Global go up and down completely randomly.
Pair Corralation between Ab Global and Aberdeen Global
Assuming the 90 days horizon Ab Global is expected to generate 1.16 times less return on investment than Aberdeen Global. But when comparing it to its historical volatility, Ab Global E is 1.05 times less risky than Aberdeen Global. It trades about 0.07 of its potential returns per unit of risk. Aberdeen Global Equty is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,059 in Aberdeen Global Equty on January 20, 2024 and sell it today you would earn a total of 148.00 from holding Aberdeen Global Equty or generate 13.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global E vs. Aberdeen Global Equty
Performance |
| Timeline |
| Ab Global E |
| Aberdeen Global Equty |
Ab Global and Aberdeen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Aberdeen Global
The main advantage of trading using opposite Ab Global and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global 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.| Ab Global vs. Ab Minnesota Portfolio | Ab Global vs. Ab Minnesota Portfolio | Ab Global vs. Ab All Market | Ab Global vs. Ab All Market |
| Aberdeen Global vs. William Blair International | Aberdeen Global vs. Artisan International Fund | Aberdeen Global vs. Royce Premier Fund | Aberdeen Global vs. The Jensen Portfolio |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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